Wave Of Booking Fraud Hits Tourism Industry

A surge of booking fraud has caused significant financial losses for Icelandic tourism companies in recent weeks, reports RÚV. What was once an occasional issue has now escalated to over a dozen fraudulent transactions daily.

Trips are booked with little notice, and almost immediately after the trip takes place, the payment is reversed by the card company with the explanation that the transaction was unauthorized.

Valur Heiðar Sævarsson, one of the business owners affected by this, says it took some time to fully grasp the situation. He adds that the short notice on bookings made monitoring even more challenging.

Several companies have fallen victim to similar scams. In a discussion about the issue in the Facebook group Bakland ferðaþjónustunnar, it was described how stolen credit card numbers, all from the United States, were used to purchase a large number of gift cards, which were then assigned to the names of Chinese guests. The information provided in the bookings, such as email addresses, addresses, and phone numbers, also appears to have been fabricated.

Valur’s company has suffered losses amounting to millions, prompting him to investigate further. He quickly noticed something suspicious: when tourists were confronted about potentially fraudulent bookings, they disappeared without attempting to prove their payments were legitimate.

None of the tourists were willing to disclose where they had purchased their trips. According to Valur, all signs indicated that the guests were aware of the dubious nature of their transactions.

One guest reluctantly revealed that the booking had been made through what they described as an Amazon-like marketplace. Despite this lead, Valur is still left to shoulder the financial losses, as the card company continues to assert that the transactions were unauthorised.

Valur says there is little he can do to prevent such fraud. Currently, the only safeguard is to block all bookings that do not include 3D authentication. However, a significant number of tourists from both China and the United States do not use this security feature, which would exclude a large portion of his customer base.

He emphasises the urgent need for payment companies to take responsibility in these cases and support the true victims of fraud. So far, that support has been lacking.