Soaring Travel Fraud Costs Airlines Over $1 Billion and Consumers Nearly $4 Billion
TAMPA BAY, Fla. (PRWEB) February 26, 2018 -- Recent estimates reveal fraudsters are scamming the travel industry out of billions of dollars each year—online card fraud costs airlines more than $1 billion annually,(1) fake hotel websites swindled Americans out of $3.9 billion(2) and some travel agencies have been hit by tens of thousands of dollars in fraudulent bookings.(3) Last October, international law enforcement agencies detained 195 individuals suspected of airline ticket fraud during a five-day sting operation.(1) Monica Eaton-Cardone, an IT executive specializing in risk management and fraud prevention, explains how to identify travel-industry scams and protect against losses.
In January 2016, the International Air Transport Association (IATA) announced that payment fraud cost the travel industry an estimated $858 million per year. Airlines absorbed roughly $639 million of those losses, while travel agents and other travel providers accounted for the remaining $219 million.(4) More recently, the IATA has calculated annual fraud losses to be in excess of $1 billion for air carriers alone.(1) Meanwhile, the American Hotel & Lodging Association (AHLA) found that the percentage of travelers snared by fraudulent websites nearly quadrupled in just two years, from 6% in 2015 to 22% last year, when scammers racked up 55 million hotel bookings worth almost $4 billion.(2) And though there are no definitive estimates of travel agency losses, a number of individual agents admit they were tricked into processing fraudulent transactions worth $20,000 or more.(3)
“Fraudulent travel bookings have become a multi-billion-dollar cash cow for enterprising criminals,” warned Eaton-Cardone, who serves as Chief Information Officer (CIO) of Global Risk Technologies and Chief Operating Officer (COO) of Chargebacks911. “Some book lavish vacations for themselves using purloined credentials; others assume the identity of a real travel agent, use stolen credit cards to book travel arrangements, and resell the flight tickets or vacation package to an unwitting consumer for cash—leaving the traveler or agent to suffer the loss. In some cases, travel providers are defrauded by actual customers who complete a trip and then file a chargeback to obtain a full refund of the purchase price.”
Below, Eaton-Cardone summarizes her top tips for identifying potential cases of travel fraud and preventing financial losses:
1. Always verify each customer’s identity. Ensure the traveler’s details match the name and billing address associated with the credit card, confirm the card verification value (CVV) code and check the user’s geolocation for online bookings. Keep a sharp eye out for digitally altered identification documents, and use behavioral analytics and/or biometric data when available.
2. Monitor for spoofed websites and social profiles. Make a habit of routinely looking up your business name and/or agents’ names across multiple search engines and social media sites. If impersonators are setting up virtual shop in your name, you need to shut them down as quickly as possible and warn your customers.
3. Confirm the authenticity of any site or caller asking for personal details or login information. Not only do consumers need to remain vigilant to avoid phony travel websites and scammers seeking to steal their credit card information, but it’s equally important for travel agents to beware of credential requests from fraudsters pretending to be affiliated with Sabre, IATA or other travel organizations.
4. Be wary of last-minute bookings and “today-only” travel offers. Swindlers need to act quickly to close a deal before identity-theft victims realize their credentials or credit card details have been stolen. They often lure customers with cut-rate, “book-now”, cash-only offers, or they try to pressure agents into processing rush bookings for travel just a few days out with the promise of a hefty commission.
5. Use automated rules to flag suspicious transactions and human insights to validate them. Automated systems can help businesses identify potential cases of fraud, but they can also result in false positives that cause legitimate bookings to be declined. Missed fraud and false positives are both detrimental to the bottom line; human analysis can be one of the most effective ways to differentiate between them.
6. Employ machine learning and software algorithms to detect new fraud tactics. Fraudsters continually search out weaknesses and experiment with new strategies to exploit them. To keep pace with scammers, it’s important for fraud systems to be able to quickly identify patterns and respond to them in real-time.
7. Seek a partner with expertise in fraud prevention and chargeback management. Most travel companies are primarily focused on travel logistics and customer service, which means combating fraud and fighting disputes often fall by the wayside. Businesses that fail to devote sufficient resources to these tasks can take a severe financial hit, which is why many find that a partner with proven expertise in these areas delivers an exceptional return on investment (ROI).
“There are many proactive measures travel companies can take to protect themselves against fraud; the examples listed here are just a starting point,” noted Eaton-Cardone. “I urge businesses and travel agents to take the initiative to educate themselves on anti-fraud best practices, emerging scams, and blacklisted domains and individuals. I would also advise them to partner with an experienced specialist who leverages advanced technology and human insights to help them minimize fraud loss, improve dispute win rates and retain more hard-earned revenue.”
Monica Eaton-Cardone welcomes the opportunity to discuss fraud prevention and tactical chargeback representment at travel industry conferences and events. She has been a featured panelist at the annual IATA World Financial Symposium, Airline & Travel Payments Summit and Travel Fraud Symposium, and is also available for interviews and future speaking engagements. For more information, visit http://monicaec.com.
About Monica Eaton-Cardone:
Monica Eaton-Cardone is an accomplished entrepreneur, speaker, author and industry thought leader who is internationally recognized for her expertise in risk management, chargeback mitigation, fraud prevention and merchant education. Eaton-Cardone found her calling as an entrepreneur when she sold her first business at the age of 19. She later became an eCommerce merchant; and after grappling with chargebacks and fraud, she took it upon herself to develop a comprehensive, robust solution that combined agile technologies and human insights. Today, Eaton-Cardone’s innovations are helping thousands of organizations achieve sustainable growth, and she continues to pioneer loss-prevention best practices as CIO of Global Risk Technologies and COO of Chargebacks911. Eaton-Cardone is a champion of women in IT and business leadership, and aims to inspire the next generation of young innovators through her nonprofit organization, Get Paid for Grades. Get to know her at http://monicaec.com.
1. Europol. “195 Individuals Detained as a Result of Global Crackdown on Airline Ticket Fraud”; press release issued October 24, 2017.
2. American Hotel & Lodging Association. “New Research Reveals Online Hotel Booking Scams Are on the Rise, Duping Consumers, Translating to Nearly $4 Billion Each Year”; press release issued June 14, 2017.
3. Rosen, Cheryl. “Travel Agent Loses $20,000 to Fraud”; Travel Market Report; February 28, 2017.
4. International Air Transport Association. “News Brief: Reducing Fraudulent Payment Transactions”; Par Excellence Magazine; press release issued January 7, 2016.
Karla Jo Helms, JoTo PR, http://www.jotopr.com, +1 727-777-4625 Ext: 802, [email protected]
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