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
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.
1. Analyzing the IP Address – It helps to reveal the geolocation or identify if proxies like VPN or TOR are used.
2. Analyzing the Email Address – Email addresses could help businesses to identify a lot about their customers. However, it all depends if an email is either disposable, high-risk or used for registering social media accounts.
3. Device Fingerprinting – It can help reveal to the business if the same device was used to commit fraud or if fraudsters were using it to buy the tickets.
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.
