The travel industry is one of the most vulnerable to fraud as there is an 18% increase during the peak summer season and a 28% increase during the peak winter season in 2024, according to a new report.
The report, published last Tuesday by the Mastercard Economics Institute, showed that fraud related to travel agency and travel company bookings is more than four times higher than the average fraud in other industries.
However, fraud risks vary significantly from city to city, according to David Mann, chief economist for the Asia-Pacific region at the Mastercard Economics Institute.
“In some destinations, you may see far more instances of fraud on the part of travel and tourism companies. In other cities, it may even involve catering services. A good example is Los Angeles, where [dining] makes up the bulk of the fraud cases we see,“ he told CNBC’s ”Squawk Box Asia” program.
According to Mastercard data, tourists reported the lowest fraud rates in the following cities:
- San Francisco, USA
- Dublin, Ireland
- Seoul, South Korea
- Budapest, Czech Republic
- Edinburgh, Scotland
However, travellers in these cities reported higher levels of fraud:
- Cancun, Mexico
- Hanoi, Vietnam
- Dhaka, Bangladesh
- Bangkok, Thailand
The type of scams commonly reported in cities also varies, with problems with taxis and car hire accounting for just 2% of reported fraud cases in Hong Kong and Barcelona, but 66% in Jakarta, Indonesia, according to the report.
Catering fraud is more prevalent in the US and the Middle East, making up 63% of reported cases in New York, according to the report. This includes restaurants that overcharge for food, add unauthorized tips or steal travelers’ credit card information, according to a Mastercard spokesperson.
Travel planning scams increased by more than 12% last year, according to the report, either through fake photos, malicious “confirmation” links that expose bank details, or other forms of deception.
Travellers should be wary of unusually low prices and summer offers that are “too good to be true”, especially in popular tourist destinations that attract large crowds, according to the report.
To protect themselves from fraudulent activities, travelers can create digital wallets, buy travel insurance or make reservations using a fraud-proof credit card, according to the report.
