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Protecting yourself against fraud when booking your vacation

P1180407Did you know that you probably have very little protection against fraudulent representations or bankruptcies when you’re booking a vacation? The time frame for disputing charges on your credit card is usually 60 days. If you’re a last-minute person who books today and leaves tomorrow, that may work for you, but those of us who plan ahead are out of luck.

Here’s a possible scenario: In October, you book an all-inclusive trip south for mid-February, but when you show up at the hotel, it’s not there. You find another one down the street, but now you’ve paid twice. How can you get your money back for the first one that disappeared? With great difficulty and under limited circumstances!

Large hotel chains, travel companies

If you’re booking with a large hotel chain that has locations all over the country and/or the world, I personally wouldn’t worry about it disappearing. Chances are, if one location went belly-up, the corporate office would step in to compensate the affected customers. If they didn’t and the media got wind of it, who would ever book with them again? The business cost would be too much for them not to intervene. Obviously there are exceptions, but even paranoid-me is ok with this one.

The problem: Vacation rentals from the owner

If you’re renting directly from the owner, what assurance do you have that the property will be there when you arrive? Yes, there are probably pictures online. There may even be multiple reviews of the property from past stays, but what if there is a mix-up with the dates and the owner double-books the property? These scenarios are rare, but they certainly happen. How can you protect yourself?

Read the guarantee of the website that you’re using

Last summer, we booked our condo in Phoenix for our stay this past February. We used Trip Advisor and it worked really well. We found one that we liked in our price range, sent the owner a message with a few questions, sorted out details, then booked and paid for it right on the site – ½ the fee when we booked, and the other ½ 30 days before our arrival date. The condo was clean, comfortable, and as it was described in the advertisement. Note: I’m not being paid to say that. 🙂

Trip Advisor has a “Peace of Mind Guarantee” that covers your vacation rental fees up to $10,000, with restrictions (so read the site yourself to see if your rental qualifies – I am not a lawyer!). Having this extra protection made me feel confident booking the rental because it extended the time period for making a claim if we needed to. This particular guarantee was for 60 days as well, but the clock started ticking as of our rental stay date, not when we paid.

There are many sites that offer these types of guarantees and each one is only as good as the site itself. If you’re booking on a site that hasn’t been around long and doesn’t have a lot of backing behind it, there may not be much additional comfort from their “guarantee”. Do your homework.

Beware of those who try to steer you away from the site’s booking forms

If a site is going to give you a guarantee, in all likelihood, you’re going to need to make the payment for the rental on the site and not directly to the owner. There is also going to be a charge for the guarantee somewhere either for you or the owner (or sometimes both of you).

Beware of people who ask you to book the rental using other forms. If you follow their lead, you lose the guarantee. I had this problem 3 times this past week. We were going to go to Hawaii next winter, and I had sent out multiple inquiries for vacation rentals for the various places we were looking to stay. Each person responded asking me to book outside of Trip Advisor. When I stated my preference to pay on the site, one never replied again, the second agreed but asked that I pay part of the associated fee on top of the rental fee, and the third absolutely refused. The only way she would rent to us was if I paid her in full either by PayPal or credit card.  Not going to happen.

Speaking of Pay Pal…

Pay Pal’s protection is actually less than the standard credit card. At the time of writing, the dispute timeline was 45 days from the date of payment. You can read the full terms here: https://www.paypal.com/ca/webapps/mpp/security/buyer-protection-resolution

The other problem with Pay Pal is that pretty much anybody can get a payment through it. In contrast, in order for a person to accept a credit card payment directly (and not through Pay Pal), they need to go through a verification process with the bank. That doesn’t mean that there is no way they won’t take your money illegitimately, but hopefully at least the obvious scammers are going to be cut out.

Bottom line

Remember that your credit card offers only limited protection when booking a vacation. Check out any other possible recourse that you may have if the seller disappears before you get to use what you paid for. Use the booking forms on the site if you want the site’s guarantee. Never pay by cash, cheque, or wire transfer.

Kind of takes the fun out of vacation planning, doesn’t it? When you’re planning your vacation, what do you do?

May 22, 2014

1 responses on "Protecting yourself against fraud when booking your vacation"

  1. Fraud sites are everywhere these days. We need to be extra careful.
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