Sun, sea ... and travel fraud?

Duke Franklin was tired of winter and was glad that spring had finally arrived. He had two weeks of vacation and was anxious to start planning a trip. His bank account wasn’t busting with cash so he used Google to search for a good deal. He found a couple of websites that offered vacation programs that appeared to be relatively inexpensive. After he selected the travel plan that fit his budget, the site instructed him to click on a link to book the trip with his credit card.

A week passed, and Duke was puzzled why he hadn’t received any confirmation from the airlines and hotel. He went online to check his credit card transactions and noticed that not only did no charges show up for the website that “booked” his trip, his account balance was depleted. Duke realized he was a victim of an identity theft travel scam. To prevent any further financial damage, he called his credit card company to report the fraud, and they immediately closed his account and issued him a new credit card.

A little foresight will forestall travel frauds

The above case is fictional but is representative of a common travel scam. Travel scams have been around for years, and fraudsters continue to come up with new versions. Vacationers need to be especially careful from the beginning when they book their travel plans and throughout their entire vacations as fraudsters wait to hijack their personally identifiable information (PII) and use it for identity theft purposes.

The Identity Theft Resource Center (ITRC) views travel scams from the five following stages (with some added material from me):

One: planning. Any search engine will produce both legitimate and fraudulent deals. Never click on pop-up or sidebar ads, which can install malware on your computer. A big red flag is someone warning you that you should book immediately before the deal ends, which will be any minute. Avoid the danger altogether by using a reputable website.

Never give out payment information over the phone, even to someone claiming to be with the hotel.”

Two: HTTPS. Before entering any PII or payment information on a website, check that the URL features an S at the end of the HTTP. S = secure. Also, avoid entering your Social Security number.

Three: transportation and lodging. Read the fine print when you book your transportation, no matter the method, or sign up for travel insurance. According to the ITRC, “There are countless ways that accommodations scams can come back to haunt you. It could be turning your credit card information over to a fake company, paying upfront for a property that doesn’t exist, paying for a reservation at a very real location only to find out the guy who sold you the reservation doesn’t even work there … the list goes on. One of the most annoying property scams is the ‘three nights in the Bahamas for $99!’ offers that you’ll find online; they’re upsetting because they’re actually legitimate properties with low prices, but the catch is in the transportation. In order to get that amazing rate, you have to purchase your transportation from them as well, and you end up paying triple what it would have cost you.”

Book directly from hotels or airlines or use a travel agency. Don’t rush the process, and seek recommendations from friends and family.

Four: enjoying your stay. Anywhere you vacation, be on alert for both local crimes and general scams. The ITRC websites warns, “Be watchful of things like the fake front desk call, in which someone calls your room and states that you need to verify your credit card number, or fake restaurant flyers slipped under your door can also steal your financial information. If you’re ever told that you’ve broken some law and must pay a fine, be sure to call the police or even the U.S. consulate if you’re abroad.”

Never give out payment information over the phone, even to someone claiming to be with the hotel. Go to the front desk to verify charges. If the caller was a scammer, contact local police and let the hotel staff know. Also, never give credit card information over the phone to hold a restaurant reservation, especially if the phone number is from a flyer someone shoved under your door. The concierge can recommend reputable restaurants. While at the restaurant, keep an eye on your credit card. Waiters can use skimmers to get the information off your card.

[Speaking of skimmers, fraudsters continue to install skimmers on ATMs to gain control of your PII. Tampered ATMs are “the number one threat action out of everything we looked at,” Verizon exec Wade Baker tells the blog KrebsOnSecurity. And this number doesn’t even count criminals who use handheld skimmers to extract card data, like the waitress at a Red Robin restaurant in Washington busted for running up a $16,000 tab on credit cards she skimmed while working. (See Red Robin waitress skimmed credit cards to tune of $16,000 plus, Q13 Fox News staff, May 30, 2013.) To help avoid this scam it might be a good idea to carry enough cash (of course this action has its own risks) or use a credit card to make purchases. Or, if you plan to use an ATM machine when traveling, use one inside a major bank.]

Stage five: home again. At home, carefully scan your accounts for fraudulent charges. (Keep your receipts!)

Also, call your credit card company to report any fraudulent activity on your credit card and request a new one. Enjoy your vacation!

More help for the community

I hope you’ll share this information with your family, friends and clients and include it in your outreach programs. As the weather starts to improve, we plan our vacations. To make it an enjoyable experience, educate yourself about all the possible travel scams and plan well ahead to get the best deals, but make sure they’re real  — not fake.

Please contact me if you have any identity theft issues you’d like me to research and possibly include in future columns, or if you have any questions related to this column or any other identity theft questions. I don’t have all the answers, but I’ll do my best. Stay tuned!

Read more: “Cry me a river: cruise operator ruins vacationers' dreams”

Robert E. Holtfreter, Ph.D., CFE, CICA, CBA, is distinguished professor of accounting and research at Central Washington University in Ellensburg, Washington. He’s also on the ACFE’s Advisory Council and the Editorial Advisory Committee. His email address is: doctorh007@gmail.com.

Cry me a river: cruise operator ruins vacationers' dreams

About 400 hopeful prospective vacationers were deprived of relaxing river cruises and defrauded of thousands of dollars because Bret Gordon took their money to support a gambling habit, according to Travel Weekly.

Gordon, the founder of Tom Harper Cruises, was sentenced in February in the U.S. District Court in Boston to 46 months in prison and ordered to pay $2.9 million for defrauding 400 customers of the now-defunct river cruise selling company. (See “Owner of Tom Harper Cruises sentenced for defrauding customers,” by Michelle Baran, Travel Weekly, February 15.)

Gordon, the company’s manager with a 65 percent stake, exclusively controlled its bank account and finances, according to court documents. According to the Travel Weekly article, “most of the funds Gordon took were customer deposits that the company needed to retain in order to pay the independent cruise companies that operated the river cruises being sold by Tom Harper Cruises.”

Gordon had used the gambling excuse before when he was caught in another crime. He blamed his gambling addiction in 1996 when he pleaded guilty in U.S. District Court in Boston to three counts of interstate transportation of stolen property in connection with stealing $130,000 from an employer, according to court records. (See "Newton tour operator accused of gambling away customers’ money," by Megan Woolhouse, The Boston Globe, Feb. 8, 2016.)

According to a lawsuit filed by Stewart F. Grossman, the trustee appointed by bankruptcy court to recover assets for creditors, Gordon fraudulently transferred more than $3 million from Tom Harper Cruises to himself between 2013 and 2015.