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Tuesday, February 27, 2018

Travel industry fraud spikes to $1 billion

The International Air Transport Association estimates that 4.1 billion airline passengers boarded 42 million flights in 2017. Yet of the $7 billion collected to process payments during the year, fraud cost the travel industry nearly $1 billion, which IATA attributes in large part to increased fraudulent usage of stolen, compromised or fake credit card details in the purchase of airline tickets.

To combat this growing fraud epidemic, the IATA formed the Payment Method Working Group to tackle industry-wide fraud. In the initial phase, the group has focused on card-not-present fraud, which impacts not only airlines, but also travel agents and other travel providers.

"Fraudulent travel bookings have become a multibillion-dollar cash cow for enterprising criminals," said Monica Eaton-Cardone, Chief Information Officer of Global Risk Technologies and Chief Operating Officer 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."

Eaton-Cardone noted that in some cases travel providers are defrauded by actual customers who complete trips and then file chargebacks to obtain full refunds. To identify potential fraud from all angles, she said, it's important to verify customer identity, monitor spoofed websites and social profiles, confirm website or caller authenticity, scrutinize last minute deals or offers, employ machine learning, and tap partners to manage chargebacks and prevent fraud.

"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," she said. "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."

Collaboration is key

Travel commerce platform Travelport recently collaborated with electronic payment provider ACI Worldwide to launch Travelport Authorize Plus, an intelligent fraud control and settlement solution for its airline customers. The enhancement integrates ACI's ReD Shield platform, an essential piece in the ACI UP Payments Risk Management solution, to deliver real-time, cloud-based multi-tiered fraud prevention to Travelport clients.

"Our partnership with ACI Worldwide is in response to the growing need to provide our airline customers with highly sophisticated tools to prevent card fraud in our industry," said Derek Sharp, Travelport Senior Vice President and Managing Director of Air Commerce. Travelport airline customers are now able to track ticketing purchases end-to-end, and Travelport-connected agents can now apply dynamic fraud screening to flag and prevent fraudulent ticket purchases.

"The major advantage of combining Travelport Authorize Plus with ACI ReD Shield is that we have built a fully integrated solution, which applies fraud control management without the need for both our airline and agent customers to do any major development or change their workflow process of today," Sharp noted.

Andy McDonald, Vice President of Merchant Payments at ACI Worldwide, added, "When it comes to fraud control, authorization, and capture and settlement, the combination of our joint capabilities has the potential to dramatically change the way air ticket transactions are processed today."

Solutions to fraud are critical at this juncture in the travel industry, which is expected to continue to boom. The IATA projected that 7.8 billion passengers will travel globally in 2036, and 1.1 billion of those passengers will originate in the U.S. market. end of article

Editor's Note:

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