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The majority of those who are defrauded pay by methods such as bank transfer or cash, with no means of getting their money back.
Fraudsters are actively encouraging these payment methods by claiming they are the only ones protected by their own bogus insurance schemes.
“I just knew in the pit of my stomach that that money was gone,” he said. Another victim, John, from Tamworth, Staffordshire, paid £930 in March last year to someone who he thought was the owner of a villa in the Canary Islands.
“There was no way of getting it back.” Mr George added: “I've learnt not to be so confident in using the internet without questioning what I'm doing. But when he later tried to find the website it had disappeared, and he discovered several Trip Advisor reviews saying it was a scam.
Tony Neate, of Get Safe Online, said holidays are often a “big-ticket item” and present “the perfect opportunity for cyber criminals to swindle unsuspecting victims out of their hard-earned money”.
He went on: “Always do as much research as you can about the organisation you're booking through, and ensure that they are a reputable travel operator that is a member of a recognised trade body like Abta.
A compromised computer contacts other compromised computers to receive commands in a peer-to-peer fashion.
The botnet is used to install additional pay-per-install malware on the compromised computer and hijack search queries to display advertisements.
Fraudsters are setting up bogus accommodation websites, hacking into legitimate accounts and posting fake adverts online.
The most common scams related to airline tickets, online accommodation bookings and timeshare sales.
A total of £7.2m was lost last year, at an average of £1,200 per victim.
He paid for his stay by international bank transfer as requested by villa firm Sol Domus via email, but when he telephoned the company the day before he was due to arrive he realised he had been conned. She received an e-ticket, but when she arrived at the airport there was no record of her booking.
Mr George, a course director from Cambridge, said: “It turned out they hadn't heard of me. It was a scam.” He explained that the firm's email account had been hacked, so even though he had been sending messages to the correct address, they were being accessed by a criminal. Stephanie was initially told she would be given a refund but her calls to the company are now not being answered.
Holidaymakers are also losing thousands of pounds by booking flights and not receiving genuine tickets.