Travel Fraud Is Rising — And Advisors Could Be Left Holding the Bill

A lucrative last-minute booking from a new client might look like an advisor’s lucky day. But Transat Distribution Canada’s (TDC) Dianne Jackson CTC, warns that it could just as easily become a major financial loss.

TDC’s Director, Franchise Affiliates & Members spoke to 300 travel advisors at TMP Calgary to highlight the growing financial threat posed by fraud — and the relatively straightforward steps agencies can take to protect themselves.

“Fraudsters today, they don’t look like fraudsters,” Jackson said. “They often look and sound exactly like your perfect customer.”

She pointed to research indicating that 75.7% of travel-sector merchants experienced an increase in fraud, while warning that artificial intelligence is making identity fraud increasingly difficult to detect.

For advisors, the financial consequences can be severe. A fraudulent booking can initially appear entirely legitimate, with the problem emerging weeks or even months later when a credit-card chargeback arrives.

Jackson offered the example of an $8,000 booking that might generate $600 or $800 in commission. If the transaction proves fraudulent, she said, the advisor or agency could potentially find itself responsible for the entire $8,000.

Four Types of Fraud

Jackson identified four primary areas advisors should understand: stolen credit-card fraud, identity fraud, travel resale fraud and so-called “friendly fraud,” in which a legitimate traveller disputes a charge after taking the trip.

Travel resale fraud is particularly complicated.

Jackson described cases in which fraudsters create convincing social-media profiles while pretending to be legitimate travel advisors. They may associate themselves with an actual travel agency or host and even direct potential customers to that company’s legitimate website to establish credibility.

The fraudster collects payment — often by e-transfer — from the unsuspecting traveller, then uses a stolen credit card to make a real booking through the legitimate agency.

The traveller subsequently receives genuine travel documents and may have no idea anything is wrong.

Jackson described one case in which fraud was discovered while a family was already travelling. The travellers ultimately had to pay again for their hotel and flights home, despite believing they had legitimately purchased their vacation.

Agencies can suffer too, even though they knew nothing about the scam. “Every time (the clients) told that story of the fraud when they were in destination, guess whose agency name gets brought into that story?” Jackson asked.

Know Your Customer

Jackson’s central advice was deceptively simple: know your customer — and recognize that the traveller and the credit-card holder aren’t necessarily the same person. Advisors should verify both.

Every new customer should go through the same verification procedure, she said, rather than advisors deciding which clients appear legit.

“Your process should not change because your new customer seems trustworthy,” Jackson said.

Watch for Red Flags

Red flags can include unusually expensive last-minute trips, customers unwilling to discuss their travel plans, pressure to complete a booking quickly, inconsistencies between addresses and telephone area codes, or a cardholder who cannot be contacted.

None necessarily proves fraud, Jackson stressed.

“It’s the red flags. It’s the things that should trigger curiosity, not cancellations.”

Something as simple as picking up the telephone can be an effective defence. Fraudsters, Jackson said, usually want transactions completed quickly and with as little interaction as possible.

“Fraudsters do a lot of work to find a stolen credit card. They don’t do a lot of work to figure the story of their vacation.”

Documentation is Essential

Preventing fraudulent transactions is only half the battle. Once a booking has been completed, Jackson said, documentation becomes critical if an agency later needs to fight a chargeback.

“If your verification process is not documented, it didn’t happen,” she warned.

Advisors should maintain records demonstrating how identities were verified, what was authorized, the terms and conditions supplied to the customer and the customer’s approval of the transaction.

Documentation is especially valuable in cases of friendly fraud, when someone who actually travelled subsequently disputes the credit-card charge.

Jackson also encouraged advisors to work with suppliers rather than viewing fraud prevention solely as an agency responsibility. Tour operators, which are generally the merchant processing the transaction, often have sophisticated fraud-detection tools.

But those tools depend on receiving complete customer information.

Jackson said advisors sometimes withhold client telephone numbers, email addresses or other information because they fear suppliers will market directly to their customers. That can inadvertently undermine both customer service and fraud screening.

“If you don’t provide the information these tools need … those tour operators can’t use their tools,” she said.

The Stakes Are High

The financial stakes make prevention worthwhile. Jackson cited one TDC agency that lost $10,000 to fraud in 2025. For an agency owner, she noted, replacing that loss requires far more than another $10,000 in sales.

Her closing message was that fraud prevention doesn’t require advisors to be suspicious of everyone who walks through the door.

“Fraud prevention isn’t about becoming suspicious of every customer,” Jackson said. “It’s about becoming more intentional with every booking.”

And once a booking has been made, she added, protecting the agency comes down to one thing: documentation.