This is the third article in the series about fraud which is presented by ATOQ, in partnership with ACTA and CATO and made possible by the support of PAX.
Have you ever heard people saying: Why do I have to pay? You're the one who accepted the credit card!
But I had an Approval Code!
It is not my responsibility!
...but yes, it is.
The travel agent / agency who deals with the customer making the purchase is the one who will be responsible if there is a problem with the credit card payment.
Most terms and conditions for both tour operators and airlines say it clearly; you as the selling agent decide to take the card as payment and it is you who will need to pay if the card payment is not honored.
As an example, terms for issuing airline tickets, Bank Settlement Plan, resolution 890:
2.2.2(a) Although Card details may have previously been verified by the Agent, ticket sales of Non-Face-to-Face Transactions shall be undertaken under the sole responsibility and liability of the Agent.
Your biggest danger happens when someone has stolen the information about a credit card, and uses it over the phone so that you never have a chance to see the real card. This is what we have referred to as a Card Not Present (CNP) transaction. Since the data about the card is good, the initial payment process will likely succeed as the only thing that is really happening is a confirmation that there are available funds to make payment.
Even when the money is immediately transferred to the tour operator or airline, there is NO GUARANTEE that the actual cardholder will not come back and say that the charge was not authorized and the bank who issues the card then immediately refunds the customer and charges back the airline or tour operator.
In many cases it can take months before the entire process is completed and the bad news is announced by the supplier to the travel agent involved. We have often seen situations where multiple transactions are handled before the problem is discovered, so the losses are much greater. Your best protection is dealing with customers you REALLY know!