Nowadays consumers are turning toward digital channels to make their travel-related purchases. Just last year, around 40% of online bookings were accounted for from the total travel-related sales in the US and Europe. In 2017, it’s expected that the global digital travel industry would grow to almost $830 billion.
Most travel agencies including airlines are already taking advantage of this opportunity that comes with the booming travel industry market. Unfortunately, the fraudsters are doing the same – considering a massive take with various fraudulent activities. Most often, fake travel agency scams are most rampant among different travel scams.
Ecommerce businesses in various industries put an extended time and effort to safeguard their revenue stream from fraud attempts. But online travel industries are facing challenges that are unique to the traveling sector. To begin, the traditional fraud detection methods are often bypassed by fraudsters. However, identifying a mismatch between credit card issuing country and IP address becomes ineffective when customers are transiting from one place to another after placing an order.
This is why geo-mismatch during a verification process either proves to be legitimate or a fraudulent travel order. As relying on such verification characteristics, the purchasers could be rejected or routed for further validation. Another challenge in digital travel fraud among reservations is interchanging travel goods. Because legitimate customers that are rejected a flight ticket due to the suspected digital travel fraud could go for the same flight ticket on a competitor’s site.
Therefore, it’s important to curb digital travel fraud by making improvements in fraud operations. Online travel merchants could ultimately reduce fraudulent attempts and enhance customer’s online shopping experience.
Most Common Digital Travel Frauds
Digital travel fraud knows no region or route and doesn’t even include the borders. Therefore, it’s important to identify specific ways that fraudsters tend to use for committing frauds. By understanding the most common fraudulent attempts, organizations could expand the fraud prevention coverage and protect against different types of digital travel frauds.
Fraudulent Ticket Purchase:
This group usually sets up fake travel agencies or online groups to sell their malicious schemes to normal people. Sometimes, they would purchase tickets and intentionally put a hold on them with fake credentials and later sell these tickets to legitimate travelers. The travelers who paid the full amount to purchase these tickets found out the airfare wasn’t real or was reported a fraud.
The fraudsters buy refundable tickets with stolen debit or credit cards that are usually picked from fraudulent chat rooms. Usually, in such rooms, fraudsters share stolen data or credentials to commit digital travel fraud. Later, the scam artists make money by making the call to cancel refundable tickets and cash on the refunds.
Last Minute Purchase:
This is among the most common types of travel fraud committed by travelers. Fraudsters tend to make a bulk of money by making a last-minute ticket purchase with a departure just around 24 to 48 hours. It’s usually completed with stolen credit or debit cards. Due to last-minute purchases by airlines and traveling, authorities have little time to detect digital travel fraud. The person can gain immediate entry with very few verification checks.
However, digital travel is not only limited to such types. As more of these fraudulent attempts are starting to emerge, online travel agencies have come with new sophisticated methods to combat such growing challenges.