With advancements in technology in recent years, it’s evident that fraudsters are stealing money from clients and travel agencies by using sophisticated methods. But according to general perception, most people think that the travel agency has higher protection than the common customers. Therefore, it doesn’t necessarily mean that the travel agencies are not susceptible to fraudulent attacks. This is the reason to know different types of Travel Industry Frauds and fight them to prevent malicious attacks. Therefore, as the travel industry grows – so do the fraudulent threats.
Online shopping tends to bring huge opportunities for various businesses and customers along-with evolving threats. Therefore, with advancements in technology – the methods of digital fraud are also constantly evolving. Although, online payments are prone to fraudulent attacks.
According to research conducted by IBM, the travel industry is the second-most industry targeted by online hackers. Fraudulent attacks cost the travel industry billions of dollars each year that results in high operational costs, damage to the brand’s reputation, including other costs. A survey commissioned by eNett in 2017 completed a global study on 60% of travel agencies that identified fraud as an evolving concern that involves making payments to the vendors. The three cases that were identified during the survey were stealing details of various payment methods, committing a cyber breach of online booking platforms, and stealing security credentials.
Why Travel Frauds are Common among Fraudsters?
Most anxious among the public would question, “why the travel industry is mostly targeted by fraudsters”? The reason is quite simple, “travel agency scams happen due to goods that have a high resale value”. Fraudsters tend to create several schemes based on such products that make it appealing to commit travel fraud. Travel goods vary from an airline ticket to an online hotel booking – it ensures that the travel industry can sell digital items for large amounts of money.
By knowing that the travel industry operates on relatively low margins – it becomes easier to see the consequences of a travel scam. More importantly, the losses tend to increase with manual reviews on expensive resources and false positives.
Different Types of Travel Scams
There are numerous ways that fraudsters tend to extort money from travelers through different platforms. Here’s a mention of few platforms and they include:
Fraudsters tend to confirm their bookings by either using fake, modified, or stolen credit cards. According to a recent report, a credit card stolen by a scam artist can be sold for as low as $14. Therefore, it’s no surprise that fraudsters use it almost all the time. These tickets are sold on the darknet or by using other means over the internet.
The second most common Travel Industry Frauds is canceling the tickets to get flight credit. Airlines use the flight credit for onboarding new customers. Scammers game the entire system by booking flights through stolen credit cards. Laters, fraudsters cancel the flight to get bonuses credited to their account. These tickets could be easily resold or used to purchase legitimate tickets and resell them later.
How Travel Businesses Can Monitor Travel Scams?
Although integrating a complete suite of end-to-end fraud prevention solutions can do a lot but there are some areas that the travel industry should be focusing on.
Transaction Monitoring
Travel agency frauds can be prevented by looking at different patterns and a few of these patterns mostly appear during the checkout process. So you should be focusing on these elements during the checkout:
1. Check for the amount that was transacted and the currency that was used.
2. Different Types of Credit Cards – Some credit card types are used often by fraudsters than most other cards.
3. Geolocation – There are few high-risk regions around the globe where fraudsters tend to log in and book their tickets.
User Profiling to track Travel Scams
Through a 360 degree view of the user, travel business could potentially save trouble in the long term. Here’s how companies can perform user profiling.
User profiling is the process of gathering and analyzing data about individuals to create a detailed representation of their online behavior, preferences, and characteristics. This practice is widely used in digital advertising, cybersecurity, fraud detection, and personalized marketing. Three key techniques in user profiling include analyzing IP addresses, examining email addresses, and employing device fingerprinting. Each method provides unique insights into user identity and behavior, raising both opportunities and concerns regarding privacy and security.
Analyzing the IP Address
An IP (Internet Protocol) address is a unique numerical label assigned to each device connected to a network. It serves as a digital identifier, allowing websites and online services to track user activity based on their location and network behavior.
How IP Address Analysis Works
When a user visits a website, their IP address is logged by the server. This data can reveal:
Geolocation: The approximate physical location (country, city, or ISP) of the user.
Network Type: Whether the connection is from a home network, corporate network, or a VPN.
Behavior Patterns: Frequency of visits, session duration, and interaction with specific content.
Applications of IP Profiling
Targeted Advertising: Businesses use geolocation data to deliver region-specific ads.
Fraud Prevention: Unusual login attempts from different locations can trigger security alerts.
Content Localization: Websites adjust language and currency based on the user’s location.
Privacy Concerns
While IP tracking is useful, it can also be invasive. Users may be uncomfortable with their location being monitored without consent. Some employ VPNs or proxy servers to mask their IP addresses, complicating accurate profiling.
Analyzing the Email Address
Email addresses are another critical component of user profiling, offering insights into personal and professional identities.
How Email Analysis Works
Domain Analysis: Corporate emails (e.g., @company.com) indicate professional use, while free providers (e.g., Gmail, Yahoo) suggest personal accounts.
Username Patterns: Common naming conventions (e.g., firstname.lastname) can help verify identity.
Activity Correlation: Linking an email to multiple accounts (social media, subscriptions) builds a comprehensive profile.
Applications of Email Profiling
Marketing Segmentation: Businesses categorize users based on email domains for tailored campaigns.
Fraud Detection: Disposable or suspicious email domains may indicate fraudulent activity.
Account Verification: Email analysis helps authenticate users during sign-ups and transactions.
Ethical Considerations
Collecting email data must comply with privacy laws like GDPR. Users should have control over how their information is stored and used.
Device Fingerprinting
Device fingerprinting is an advanced technique that identifies users based on their device’s unique configuration. Unlike cookies, fingerprints are harder to delete or reset.
How Device Fingerprinting Works
A combination of device attributes creates a unique identifier, including:
Browser Settings: User-agent strings, installed plugins, and screen resolution.
Hardware Details: CPU type, GPU performance, and battery status.
Network Information: Connection speed and time zone settings.
Applications of Device Fingerprinting
Fraud Prevention: Detecting multiple accounts linked to the same device.
User Authentication: Verifying returning users without requiring logins.
Ad Tracking: Serving consistent ads across different browsing sessions.
Privacy and Countermeasures
Critics argue that fingerprinting is overly intrusive, as users are often unaware of the practice. Privacy-focused browsers like Tor or Firefox resist fingerprinting by limiting data exposure.
Mitigating the risks is necessary for various industries but it’s especially important in the travel industry, where the margins are low and competition is quite fierce. Coupled with these two challenges, the travel industry has to deal with a high resale value of its goods online. Fortunately, to curb this situation, various AI-based identity verification solutions are available in the market to improve results in the travel industry.