Topic 1: The sneakiest holiday money scams and how to avoid them

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Travelling can be one of the most enjoyable experiences ever, but falling victim to a fraud can put a big dampener on your holiday.

In a series of stories, we’re exploring some of the most common travel money scams, different options for travelling with money, how to get the best foreign exchange rates and how to ensure you’re adequately insured for your holiday – all so when you jet, sail or drive off on vacation, it’s enjoyment all the way!

Pre-holiday scams to be aware of

Even before you begin planning your trip, scammers can fool you into booking flights or holidays that don’t exist.

Travel at 60 recently reported on the Virgin Atlantic 35th anniversary scam doing the rounds on messaging service WhatsApp, which offered free flight tickets if the reader completed a survey or clicked on a link. The link appeared to go to the airline’s site but in fact allowed fraudsters to access the personal details of those who clicked it.

As always, if a deal looks too good to be true, it probably is. When you open any email, check that it’s from a reputable brand, and even then, check that the links you’re clicking don’t have dubious spelling or unusual addresses. Call the company involved if you’re still unsure, so it can verify the existence of the deal or offer.

In a similar vein, the Australian Competition and Consumer Commission offers tips on how to avoid what it calls ‘travel prize’ scams – the ones that involve amazing offers of heavily discounted tickets or hotel rooms, but first require an upfront payment that the scammer usually promises will be refunded at a later date.

Also, ensure you read the fine print on any travel booking site, however legitimate it appears. The American Hotel and Lodging Association says that in 2016, 23 per cent of travellers reported being misled by third-party websites that purported to deal in hotel bookings but ended up adding extra charges to their credit cards and losing their prepaid reservation.

To avoid such a loss, book directly with your accommodation provider or through a trusted, multinational site and if possible, choose booking options that permit changes and for payment to be made at the hotel itself and not prior.

Scams to look out for when you’re on the road

Throwing caution to the wind once you set off on vacation isn’t entirely sensible either. Currency-related scams are still one of the most common ways travellers are ripped off once they’ve left their home country.

Adrian Pin, Westpac’s head of international needs, warns that short-changing of currency either in a shop or currency exchange is one of the obvious tricks played on foreign visitors, mainly because it’s relatively easy for the scammer to do.

Pin notes that travellers sometimes land in airports late at night and – as happened on his own recent trip to India – are bombarded in the arrivals lounge with foreign exchange booths soliciting business. The cacophony and confusion means that you’re less likely to notice being short-changed, while the location means that even if the exchange provider is honest, the rate is unlikely to be in your favour.

Buying currency at a hotel is also popular with travellers because it feels more secure than braving a booth in the street or at the airport, but Pin points out that hotels often offer even less favourable rates than airport exchanges.

“Airports and hotels are often the worst place to exchange currency, because they’re just more expensive” he says. “There’s a captive audience. And at the airport, you’ve just got the craziness, and you often need money the minute you get off the plane. But that’s typically not a great way to do it.”

If you do need to exchange money when you’re on the ground, it’s worth heading to the central business district or a reputable local or international bank, and shopping around if you can.

One of the other common, unsophisticated frauds is for scammers to intentionally create some misunderstanding around which currency an item is priced in, or to bamboozle and embarrass tourists into forking out more than they intend by creating confusion around the price of an item.

“On the way up, there were all these fellows selling souvenirs,” Pin says of his recent trip to Amer Fort near Jaipur while in India. “They were all hand-stitched and lovely. Their cheeky little trick was to tell you that it was ‘100, 100’, and you might think it’s 100 rupees, but what they’re really saying is 100 in your dollars. Or are they saying $100 US dollars? Or $100 Hong Kong dollars?”

Pin points out that in many cultures, bargaining is way of life, and an important way in which locals make their living, and should be viewed as part of the cultural experience of your holiday.

A similar scam involves a helpful seller offering to wrap the item you’ve just purchased, only to remove it from your sight so it can be quickly swapped for a lower-value replica, leaving you to discover you’ve been had only when you get home.

Before you hand over any money, perhaps write down your understanding of the price and currency, and agree this with the seller. Also, double check that the seller enters the correct amount and currency into the point of sale device if you’re paying with a card.

And as many travellers already know, taxis can be a prime spot for a rip-off based on a ‘misunderstanding’, whether it’s over the length of the journey or the cash exchanged.

“The tip there is to always understand and agree a price before you set out so that you can avoid that confusion later,” Pin said, noting that these days it can be safer to get an Uber which operates on an agreed tariff and doesn’t require physical cash to change hands. If that’s impossible, always ensure that the taxi has a meter and that it’s switched on and in your plain sight.

There are also plenty of more sophisticated frauds to look out for when abroad.

Just as at home, identity theft is a risk, so seasoned travellers recommend always looking carefully before using an ATM in case there’s a hidden camera designed to record your PIN or a fake front that will ‘take’ your card. Another tip is to ensure you don’t allow your credit or debit cards out of your sight when making a purchase.

A common and high-value scam, meanwhile, is the fake timeshare or travel club membership, which usually involves the victim being encouraged to spend thousands of dollars to purchase the right to book luxurious accommodation in the future – it later emerges the accommodation isn’t bookable at any time convenient to the buyer, or doesn’t exist at all.

Despite the existence of scammers and fraudsters, travel is still a fun and rewarding experience most of the time.

Tips to avoid being scammed

Pin suggests these tips to avoiding being scammed while travelling:

  • Don’t carry large amounts of cash
  • Carry a combination of cash, credit and debit cards, or a travel money card so you always have a fall-back option
  • Ensure you have back-up copies of all the key contact numbers in your phone (or a photo stored on your phone) so you immediately contact your bank should you have any bank-related money issues
  • Make sure you agree and confirm the price (and currency) for anything you buy before you hand over any cash
  • Have a ready reckoner in your wallet or purse, which shows what, say, $1, $10, $50, $100 and $200 in your money is worth in the local currency. This can save making mistakes when you need to do quick exchange-rate conversions or work out how much something costs.

Have you ever been scammed while travelling? What travel scams have you spotted in your travels?

Find out more Westpac has been proudly supporting Australians through all of life’s wonderful, agonising, and exhilarating moments since 1817.

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.