A Chinese tourist poses for a selfie in front of the Sydney Opera House on March 8, 2017. Some Chinese have been sold tickets to Australian tourist attractions obtained fraudulently on WeChat.  Photo: Reuters/David Gray
A Chinese tourist poses for a selfie in front of the Sydney Opera House on March 8, 2017. Some Chinese have been sold tickets to Australian tourist attractions obtained fraudulently on WeChat. Photo: Reuters/David Gray

According to a report by ABC News in Australia, a scam on Chinese messaging platform WeChat is causing hundreds of thousands of dollars in costs for tourist attractions in Australia. The scam leverages the popularity of pre-purchased tickets in the Chinese tourism market, stolen credit cards, and WeChat payments to sell tickets obtained with illicit funds. For one Australian tourism company quoted in the report, 13%  of all online tickets sold in March were fraudulent.

With the introduction of mobile payments on WeChat, China’s most popular messaging platform quickly evolved into a commerce platform where companies have set up stores to sell products and services directly to WeChat’s hundreds of millions of active users. However, it has also become a common platform for transactions between individuals, whether it’s for splitting a bar tab, or in exchange for products and services. Over Chinese New Year this year alone, WeChat users sent 46 billion “red envelopes” – digital envelopes filled with cash – to one another.

However, such transactions have also provided a tool for WeChat users who sell illegal goods, as well as leading to real-money gambling on the platform. On WeChat, verifying the authenticity of goods sold by individuals can be difficult, as the platform doesn’t offer any customer-review system or similar verification mechanisms seen on most online market platforms.

In the case of the WeChat ticket scam that is currently causing damage to Australian tourism businesses, the situation is even more convoluted than sellers simply selling fake tickets. Instead, the scam involves stolen credit cards that are used by the sellers to acquire authentic tickets, which in turn are sold at a discount to WeChat users.

The result is that purchasers in fact receive authentic online tickets for tourist attractions in Australia that they can use during their travels. However, Australian tourism businesses targeted by the scam find themselves liable to refund these fraudulent ticket purchases to the bank as soon as the credit cards are flagged for fraudulent activities. At that point, the tickets have already been issued for use, and the scammers have converted stolen credit-card funds into their digital WeChat wallets with no clear trace back to the stolen credit cards.

Chinese travelers who have unknowingly been made an accessory to credit card fraud remain unaware that the tickets they purchased at a discount were illicitly obtained.

Mark Stone, chief executive of the Victorian Chamber of Commerce and Industry, told the Australian Broadcasting Corporation that the scam was first detected two months ago, but that he believed it could continue to affect tour operators across the country. It also remains unclear whether the scam is limited to targeting Australian tourism businesses or if it’s just the tip of the iceberg of a larger operation that is targeting China’s booming international tourism market.

“We’ve spoken to nine operators, and this scam has cost them A$400,000 [US$300,000], but it is probably much more because it’s likely many operators are unaware of this scam and have therefore been caught out,” Stone told ABC reporters.

Jeremy Johnson, former chairman of Victoria state’s tourism council, said the scam was almost impossible to detect, quoting the enormous size of the Chinese online ticket market as one of the reasons it is a difficult crime to prevent.

For tourism businesses, the ticket scam puts them in a precarious situation. While they have no choice but to refund fraudulent purchases, canceling tickets associated with these purchases would only end up harming travelers unwittingly caught up in a scam, and in turn, may damage the business’ reputation among Chinese tourists.

In Australia, Chinese visitors now make up the second-largest tourism market, and they are poised to overtake New Zealanders for the No 1  spot perhaps as early as this year – making the prevalence of fake tickets in the Chinese market a particularly serious problem.

While Australian tourism officials believe that the recent revelations are only the tip of the iceberg, it remains to be seen if the scam will start to emerge in other destinations popular with China’s connected travelers.

This article originally appeared on Jing Travel.

Excited about the prospects of a more interconnected world, Daniel is passionate about global travel and the opportunities it brings to brands and destinations throughout the world. Prior to joining Jing Daily, Daniel spent significant time in China conducting field research and later joined a consultancy firm focused on global Chinese travel. Coming from a finance background, he puts great emphasis on data and the business of travel.