What’s the Tea House Scam? Here’s how to avoid this costly tourist trap

The Beijing Tea House Scam is one of the most well-known tourist traps around the Forbidden City. Unfortunately, Lawrence Andrews had never heard of it. That is until after he was already a victim of the con game during a business trip to China. 

His visit to a local tea house was at the request of a friendly fellow tourist he had just met. But what happened next was anything but friendly. After sipping tea together, sharing some light snacks, and having a lively conversation, Andrews was handed the tab. 

As Andrews’ suspicions grew about what exactly was going on, his companion vanished. Left alone, he was eager to leave. Handing over his American Express card to the hostess, he expected the bill to convert to about $250.

He was way off with his estimate. 

When Andrews returned home and signed into his American Express account, he was thunderstruck. That’s when he discovered that he had just become a victim of the Beijing Tea House Scam, to the tune of $4,704. 

Things only got worse from there. Soon American Express rejected his credit card dispute, claiming he had authorized the charge. That’s when he turned to our advocacy team for help.

Will Andrews ever get his money back? Let’s find out.

What exactly is the Beijing Tea House Scam?

If you are unfamiliar with the tea house scam, which is not entirely unique to Beijing, here’s how it works in five steps:

1. A friendly “fellow tourist” strikes up a conversation with their intended victim. This scammer, who is often an attractive young woman, has been sent out to hunt for unsuspecting visitors to the area and draw them into a local tea house.
2. This new friend expresses a keen interest in getting to know the tourist better while practicing English together. 
3. The scammer then invites the tourist to have some refreshments in a local tea house. 
4. Once inside the tea house, the victim and predator are seated in a private room. They’re either given a menu with no prices or the hostess simply starts bringing teas and snacks. 
5. After a bit of time, the host or hostess shows up with the bill and the new friend leaves suddenly. The final tab for this little get-together is usually astronomical, and frequently, the tourist doesn’t even know they’ve been scammed until much later when they see the converted cost on their credit card bill. 

During Andrews’ short visit to the tea house, he says he did enjoy some food and tried a few teas. Because of its location, he assumed the little tray of snacks and tea samples would be highly overpriced.

As he was preparing to leave, the hostess handed him a bill and he noticed the woman who had brought him there was gone. He signed the receipt and asked for a copy.

“[The hostesses] said they were unable to give me [a copy of the receipt],” Andrews told me. ” I knew something was wrong and that this must be a tourist trap.”

He never imagined what this clandestine rendezvous might actually end up costing. 

Initiating an American Express dispute

Andrews headed back to his hotel and immediately called American Express. Although he knew at that point that something was wrong with this tea house, he didn’t know the full extent of the scam until after he returned home.

During his call to American Express just minutes after leaving the tea house, he says that a representative reassured him. That agent told Andrews that the company would defend him against any fraud.

But it didn’t.

When Andrews arrived home, he checked his American Express bill. He was shocked to discover that the uneasy feeling he had in Beijing was entirely justified. The scam had far exceeded any of his imaginations. The $4,700 pending charge from the tea house had now become permanent and American Express was expecting him to pay the bill. 

Andrews immediately filed a credit card dispute and American Express temporarily reversed the charge.

A month later, Andrews was shocked to learn that American Express found in favor of the tea house. He appealed the decision and lost the appeal on the chargeback as well.

That’s when he reached out to my advocacy team:

There is no way a person could run up a tab of $4,700 at that tea house – this is a scam. That is a fraudulent merchant. But after an investigation on July 27, I officially lost my American Express dispute and the appeal. The $4,700 reappeared on my statement. Is there anything you can do to help?

Lawrence Andrews, Beijing Tea House Scam victim

Tourist traps flourish worldwide

As I read through Andrews’ paper trail, I noted the similarities between his experience and that of Simon Khin. If you are a regular reader of this site, you might recall Khin’s unfortunate plight. (Will his failed Capital One chargeback end in a $4,800 loss?)

Khin had visited a coffee plantation in Bali and purchased a $48 souvenir coffee tin. That merchant added extra zeros to the receipt and charged Khin $4,800 after he flew home.

He also initially lost his chargeback dispute and appeal and reached out to our team for help. When I read through Khin’s paper trail at the time, it seemed that no one at Capital One had taken a look at the facts of the case. Khin had not purchased $5,000 of coffee at a small gift shop in Bali. But the merchant sent a signed copy of a receipt which clearly had those extra zeros squeezed in post-signing.

Eventually, I found an executive at Capital One who was willing to examine the evidence. Khin got his money back and the bank put that merchant on notice. And since that time, Capital One has reversed many valid credit card disputes that consumers initially lost based on a merchant’s fraudulent rebuttal (See: How did I lose a credit card dispute against a bankrupt merchant?)

I hoped to be able to have the same success convincing American Express that it had sided with a fraudulent merchant committing scams on tourists. . 

To get started on this case, I searched the Internet for this specific tea house. And the news wasn’t good. This place seems to be identified as the poster child for the Beijing Tea House Scam. Disgruntled victims of this tourist trap have even taken revenge by painting over the storefront of the tea house with the words “thieves” and posting photos.

After taking a look at all this information, there was no question in my mind that American Express should permanently reverse this charge.

Convincing American Express this is a scam

Certainly, the banking giant should want to know if one of its approved merchants might be conducting a scam. And based on the internet footprint of this establishment, it might be prudent for Amex to reconsider its status. After all, if this is a fraudulent charge (which it is), this merchant used American Express as a conduit for its nefarious plan.

Andrews’ American Express dispute had been particularly frustrating since various representatives had reassured him that he wouldn’t be responsible for the charge. Phone representatives seemed to understand the outrageous nature of this $4,700 bill.

So why did Andrews initially lose his American Express dispute? I was as puzzled as Andrews.

The Fair Credit Billing Act protects consumers

The Fair Credit Billing Act protects consumers against many types of credit card “billing errors” and fraud. Fraud was the basis of Andrews’ American Express dispute. He did not authorize the tea house to charge his card $4,700. Of course, the problem here was that, without a receipt, he had no idea what he actually approved. 

When a consumer disputes a credit card charge, the credit card company initiates an investigation. It presents the merchant with the complaint, and the merchant must respond with evidence within 30 days.

In this case, the tea house produced the two receipts that Andrews signed. Although it did not show any evidence as to how Andrews ran up a sky-high bill at their small establishment, Amex sided with the merchant.

Here’s where common sense could have resolved this problem months ago. If someone had actually taken a look at all of the evidence and not just the signed receipts, the case should have gone in Andrews’ favor.

But Andrews didn’t give up. He kept calling American Express and then eventually contacted our advocacy team.

As I typically do, I built a case around the evidence and presented it to American Express. That evidence also included a phone call that Andrews had recorded from an American Express representative who assured Andrews he wouldn’t be responsible for the $4,700.

And that did the trick. Andrews soon received his $4,700 refund. He’s pleased with the outcome, and hopes his story will serve as a warning to travelers everywhere — don’t sign receipts unless you know what you’re signing. And, I would add one more piece of advice: If a merchant refuses to give you a copy of what you just signed, take a photo of it. You might need it later.  

Quick tips to avoid becoming a scam victim during your travels

• What are the latest tourist traps? Always familiarize yourself with the latest and most common scams your destination is known for before you leave. The U.S. State Department is a great place to determine what you should know about all the countries on your itinerary. Check out the Safety and Security tab and you’ll learn about any scams travelers have reported to the State Department. 
• Don’t trust strangers: If a stranger approaches you and immediately asks you to go to a secluded alternative location, you should see this as a giant red flag. Yikes! Use your common sense. In most cases, the least dangerous thing that could happen to you is the Tea House Scam. In some countries, you might be heading straight for a mugging or worse if you go with a pretty lady off the main tourist drag.
• Only accept invitations as a group. Scammers tend to target lone wolves while out on the street. If you’re traveling alone and someone is overly friendly with you and wants to take you somewhere, be very careful. Of course, sometimes that person’s motives may be pure, but I’m sorry to say that, more often than not, in this scammer-filled world, they aren’t. If something seems off to you, it probably is. 

Happy travels and stay safe!!  (Michelle Couch-Friedman, Consumer Rescue)