The tourists who booked whale watching and snorkeling tours run by And You Creations seemed like any other visitors. 

With reservations in hand, they climbed aboard the boats, enjoyed the views of Hawaiʻi’s shorelines and swam with sea turtles. But after the tours were over, the company was notified by credit card companies that their cardholders had disputed the charges.

“Most of them say they didn’t authorize the charge,” said Risa Yoshida, who works at And You Creations’ reservation desk. 

Time and again, the credit card company reverses the charge, forcing the business to eat the cost of the tour.

The tour company may be a victim of a sophisticated “chargeback scheme” that the Hawaiʻi Tourism Authority warned this week has struck a number of businesses, including Kualoa Ranch, the Polynesian Cultural Center and the Hawaiʻi Dive Center.

Though tourism officials don’t know all the details, they suspect it works like this: Scammers use the Chinese social network Little Red Book — also known as Xiaohongshu or RedNote — to advertise steeply discounted tickets to Hawaiʻi attractions, including state parks and Pearl Harbor, as well as activities such as whale watching, scuba diving and snorkeling.

The discounts are as high as 50% or 60%, said Dennis Suo, the managing director for Hawaiʻi Tourism China, a division of the tourism authority.

Tourists buy those discounted tickets through the scammers, who then book full-price tickets with the tour company, possibly using stolen credit cards, Suo said.

“For the consumer, they have no idea,” Suo said. “They see those beautiful pictures and ads and probably just pay it to the third party.”

The third party — the scammer — shares the booking information with the tourists, who go on the excursion.

Some time later, the scammer or the accountholder of the stolen credit card contacts the credit card company to dispute the charge from the tour company, Suo said. The credit card company contacts the tour company, and the charge is eventually reversed.

“The credit card holder may be in some other countries, even, not in China, not in U.S.,” Suo said. “They say, ‘Oh, I’ve never been to Hawaiʻi. How come I’m being charged $100 from Kualoa Ranch?'”

The scammer, meanwhile, keeps the money the tourists paid for what they thought were discounted tickets.

Company Is Losing Hundreds of Dollars A Day

The problems for And You Creations started in December, Yoshida said. The company now gets three to four dispute notifications per day. 

The bookings are usually connected to reservations made under Chinese names, she said. Sometimes they’ll use English-sounding names to book, but the names signed on their liability waivers are Chinese. 

And You Creations has had more credit card disputes in the first three months of this year than all of last year, according to Yoshida. Oftentimes, a single dispute involves a group of four or five people whose tickets were booked for $99 to $189 each, meaning the company is losing out on hundreds of dollars a day. 

Every time a charge is disputed, Yoshida said, the tour company presents evidence to the credit card company, including photos of the customers, showing that they did in fact take the tour. 

Not only does that take a lot of time, she said, it doesn’t seem to matter. “It never ends up in our favor,” she said. “It’s not fair.” 

Ocean Adventures owner Steven Fenwick, whose company offers small group cruises around Waikīkī, said he experienced chargeback fraud about a month ago. The booking was for two or three people, although he didn’t think they were Chinese. 

“They said they were disputing the charge as if it didn’t happen,” he said. 

Fenwick said he contacted the credit card company with proof of the booking but ultimately let it go. 

“It sure doesn’t make me happy. I work hard for what I get,” he said. “It’s disheartening that we have people like that.” 

The Hawaiʻi Tourism Authority’s China team is taking steps to combat the fraud, including reporting suspicious accounts on Little Red Book, warning consumers and meeting with the commercial department of the U.S. Embassy in Beijing. 

Anyone who experiences this kind of fraudulent activity should thoroughly document the incident and contact law enforcement, Suo said. He suggested that tour companies tighten their check-in procedures by asking guests to present the credit card used to make the booking, along with a matching photo ID.

“They need to do their due diligence to check and verify those bookings,” he said.