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Table of Contents

Lead Story

The payments journey: From point of sale to points of commerce - Part 3

Dale S. Laszig

News

Industry Update

New Briefs

Views

ACH volume tops 25 billion, faster payments advance

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
Finding the right ISO partner

Aaron Nasseh
Finical Inc.

Keep customers happy, improve your bottom line

Mike Ackerman
DigiPay Solutions Inc.

One. Thing. At. A. Time.

Jeff Fortney
Clearent LLC

Help merchants keep travel sales sky high and fraud grounded

Don Bush
Kount Inc.

Company Profile

Platinum Choice Bancard LLC

New Products

EMV-certified, semi-integrated mobile payment solution

Infinea
Infinite Peripherals

Inspiration

Persist, but pay attention

Departments

Letter from the editors

ReadersSpeak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

May 08, 2017  •  Issue 17:05:01

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Help merchants keep travel sales sky high and fraud grounded

By Don Bush

While spring weather could not be more different from coast to coast (with the East Coast pummeled by a springtime blizzard, while the West Coast went full-on summer mode with 80 degrees and sunshine), consumers across the country do have one thing in common – summer travel booking. As travel merchants prepare for an influx of sales, they need to be prepared for the potential pitfalls that might follow: fraud and chargebacks.

With Forbes Media LLC reporting in January 2017 that 42 percent of Americans plan to take a vacation this year, it's important for merchants to be on top of their game when it comes to beating fraud.

Opportunistic attackers often capitalize on busy periods of increased activity, hoping overloaded businesses and preoccupied consumers will let their guard down. And fraudsters are only becoming savvier, preying on travel sites with new threats, while businesses are still trying to catch up to last year's schemes.

Three major threats to travel sites

Following are three significant threats affecting travel businesses this year, along with ways your merchant customers can combat each:

  1. Synthetic IDs: Synthetic IDs are fraudulent identities developed by criminals who take legitimate pieces of personal information from various individuals and combine them into a new, hybrid identity that only exists in the virtual world. Fraudsters then use this info to open new, fraudulent bank or credit card accounts, which they then use for booking travel. With the influx of data breaches noted by Kount in March 2017, http://blog.kount.com/blog-against-fraud/its-not-you-its-data-breach-déjà-vu, fraudsters have even more information at their disposal to create a stockpile of synthetic IDs.

    In order to combat this, businesses need to make sure their fraud prevention system is monitoring all aspects of an order: names, addresses, email addresses and credit card information should all match up across the board. If the same address or credit card numbers are being used across multiple accounts or names, that's a huge red flag.

  2. Loyalty fraud: Criminals aren't just after credit card numbers and personal information; anything of monetary value is fair game, including your customers' loyalty accounts. Loyalty fraud tends to work along the same lines as card-not-present fraud, with account information accessed through a mixture of phishing scams, identity theft, and hacking weak and vulnerable passwords. Once control of an account is taken, fraudsters can hijack your loyal customers' points, emptying their accounts through any of the company's redemption options.

    Remind your customers that their loyalty accounts should be treated like cash or sensitive credit card information and monitored often. Travel companies must also keep a close eye on loyalty point transactions just as they do traditional transactions, which have the same signs of fraud including: different addresses, different Internet service provider addresses, different spending patterns and testing on small item purchases before going for big-ticket items.

  3. Chargebacks: Many merchants don't know they're being attacked until it's too late. Chargebacks can appear with both fraud attacks and friendly fraud – when legitimate customers take advantage of your business. This can be through the claim that they didn't authorize a charge to your site when they actually did, stating they never received an item they, in fact, did receive and requesting another one to be sent, or through account or credential sharing, where they let their friends or family access your services without paying for an account of their own.

    By the time chargebacks are typically reported, you're 60 to 90 days or more down the road. That means you missed the chance to stop fraud. In addition, you'll have a harder time identifying the cause of that fraud so you can prevent it in the future. And finally, the lag in chargeback reporting means your financials will not show a true picture of your company's economic health, distorting month-to-month performance.

    In addition to keeping a close eye on repeat offenses and customers' transactional histories, it's important to clearly outline your business' terms and conditions when it comes to dealing with this type of fraud.

Remember, many travel sites and bookers are not experts in fraud – and that's OK. They're not expected to be. The most essential step merchants can take to protect their businesses is to acknowledge any vulnerabilities they have (whether that be chargebacks, friendly fraud or a blanketed approach to declining transactions) and work with experts to make sure they have a comprehensive system in place that monitors and prevents fraud, without reducing legitimate transactions. Don't let fraud affect sales for your merchant customers doing business in the travel industry.

Don Bush joined Kount as Director of Marketing in October 2010 and became Vice President of Marketing in December 2012. Previously, he was Director of Marketing at CradlePoint, a leading manufacturer of wireless routing solutions in the mobile broadband industry. Don has worked in several management roles within the technology segment for over 20 years with both hardware and software manufacturers, and as a partner in two top technology marketing agencies. He has led products launches and marketing programs for dozens of companies around the world such as Citi, HP, IBM, Kodak, Motorola and Weyerhaeuser, and he co-authored the seminar series, "Common Launch Disasters and How to Avoid Them." Contact him at don.bush@kount.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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