While you are planning your summer vacation, con artists are getting ready for their busiest season. Every year, consumers lose billions of dollars in travel-related scams. Vacation companies mysteriously vanish with travellers' money. Or, they provide services or accommodations far below what they promised. Terrific deals quickly turn into costly mistakes.
While not every special offer is a scam, it pays to be wary. Here's how to outsmart the scammers.
How to spot a vacation scam
Phony vacation deals often look professional and sound good. This makes it hard to pick out the scams. Look for these warning signs:
- You receive a special offer from a source you don’t know. You don’t know the company and didn't sign up for any promotion. The con artist may tell you that you have been "specially selected" to receive the offer. They may ask you to pay a small upfront fee. For example, you’re offered a free vacation from a travel club. You have to pay $200 to join. You think that’s a great price to get a trip worth thousands of dollars. The problem is, you will likely never get that vacation – or hear from the company again. If you ever did get the trip, you would find out you couldn’t choose the travel dates. Or, the accommodation is sub-standard – worth about what you paid to become a club member.
- An offer seems too good to be true. There is likely a catch or a drawback. For example, you are told you will get free airline tickets from a travel company. The catch is that you have to buy your hotel and meals from the same company. These prices are set high enough to cover the cost of your cheap air travel. So you don’t save any money.
- An unknown caller tells you that you won a contest you didn't enter. You may even have to pay to receive the prize.
- An unknown caller or unsecured website asks you for your credit card number to reserve a free trip. You haven’t seen any details in writing. And if you pay the fee, you will never hear from the travel company again.
- You have to pay for the vacation more than 60 days before you leave. This means you can’t dispute the charges on your credit card if you don’t receive what you were promised on your trip. Most credit card companies have a 60-day limit on disputes.
- The salesperson uses high pressure tactics. For instance, they offer a big discount on a trip if you book immediately. Or, they try to rush you into buying a timeshare right after you’ve heard the sales presentation. You may even be pressed to buy a timeshare that hasn’t been built yet. Being hurried is one of the big signs of a scam.
- You’re invited to become a travel agent to get special discounts and prices. The catch is you have to pay a fee for your training. Once you do, you find out that no authority will recognize your credentials.
Remember: most people want to save money when they travel. Vacation scammers know this. That’s why they try to pressure you into a decision on the spot, before you have time to think things through.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.