The five most common types of travel fraud

The five most common types of travel fraud (and how you can fight them)

You work hard to provide seamless, memorable experiences to your customers. You’re not just offering flights, rooms or tours - you’re delivering experiences based on trust. But fraud is eroding that trust, quietly costing the industry billions. In fact, the global travel industry loses over $25 billion to fraud each year, and that number is growing.

Here’s a look at the most common types of travel-related fraud targeting your industry, and what tools are available to protect you.

1. Fake bookings & stolen credit cards

The problem: Fraudsters often use stolen credit card details to make bookings for flights, hotels, or activities. These appear legitimate at first – the transaction goes through, the customer receives the service – but then the real cardholder notices the charge and initiates a chargeback. The result? You lose both the money and the service already provided.

How to avoid it:

Fraud screening tools, powered by smart algorithms, can analyse customer behaviour in real time and flag unusual transactions before they go through. Use tokenized payments, which means the real card number is replaced with a unique code (or “token”) during a transaction. This protects sensitive data from being exposed or reused by fraudsters.

Also, keep an eye out for unauthorised use of your brand — scammers often impersonate trusted companies. If you discover a fraudulent website using your branding, you can report it to Google Safe Browsing (https://safebrowsing.google.com/safebrowsing/report_phish/) or your domain hosting provider. For UK-based businesses, Action Fraud is also a key reporting channel.

2. Overpayment & refund scams

The problem: A scammer books using a stolen card and claims they’ve accidentally overpaid. They request a partial refund to a different card or account. When the original transaction is later reversed due to fraud, you’re left out of pocket – often for double the amount.

How to avoid it:

Make sure your refund policies clearly state that refunds will only be returned to the original payment method. Avoid processing refunds to different accounts under any circumstances.

To reduce risk further, combine manual review with fraud detection technology such as machine learning tools that look for unusual patterns. For example, repeated overpayment claims or refund requests with mismatched account details are red flags that should be investigated. For added protection, take a multi-layered approach to fraud prevention, combining manual oversight with advanced technology, such as AI or machine learning, to analyse transaction data and identify suspicious behaviour.

3. Merchant impersonation

The problem: Fraudsters clone your branding - photos, name, even your website - and set up fake booking portals. Customers unknowingly pay them, thinking they’re paying you. The result? Lost revenue and damaged trust.

How to avoid it:

Protect your digital footprint by using secure payment providers that offer 3D Secure authentication, a layer of protection that asks users to verify their identity during checkout (for example, via a code sent to their phone).

Ensure your own website and booking platforms are secure (look for “https” in the URL) and make your contact details easy to find – including phone numbers, email addresses, and physical locations. This allows customers to verify your legitimacy. Finally, verify your social media profiles where possible, helping users distinguish you from fake accounts.

4. Chargebacks (friendly fraud)

The problem: A customer books a trip, takes it, and then disputes the charge with their bank. You lose the revenue, plus time and effort trying to fight it. Friendly fraud now accounts for approximately 60-80% of all chargebacks.

How to avoid it:

Clearly outline terms and conditions, making sure customers are fully aware of your booking, cancellation and refund purchases. Use clear and recognisable merchant names on documents and bank statements to avoid confusion and keep detailed records of every transaction and communication, so you’re ready to respond to disputes. Secure payment platforms can flag high-risk transactions before they become a problem. See Ecommpay’s guide to chargeback fraud for expert support.

5. Phishing & fake confirmation emails

The problem: Scammers send fake “confirmation” emails using your company name, requesting additional payments or updated details. Customers fall for it - and you get blamed. A significant percentage of cyberattacks begin with phishing attempts - reports indicate 91% of all cyber attacks start with phishing emails.

How to avoid it

Use secure, branded communications that your customers trust and secure payment platforms that travelers can use to verify transactions. Never send sensitive payment requests via email without secure links and educate your customers on when an email or text is legitimate. Consider implementing multi-factor authentication (MFA) for high-value bookings.

Awareness is your first line of defence

Fraudsters are getting more sophisticated, but so are the tools available to stop them. By staying informed, building in layers of payment protection, and using smart verification processes, you can significantly reduce the risk of fraud and give your customers the confidence to keep booking with you.

About Ecommpay

At Ecommpay, we’re all about making online payments smooth and seamless for businesses ready to grow. We’re not just a provider – we're your trusted partner, here to keep your payments flowing effortlessly and help you get the most out of every transaction.

We believe in financial freedom and inclusivity for all. Our payment gateway brings together direct acquiring capabilities, 100+ alternative payment methods, open banking, and Direct Debits, all through a single integration. Plus, our team of experts is always here to support you and help your business thrive. Find out more about Ecommpay here.