Keep Travel Sales Sky High and Fraud Grounded
While March weather could not be more different from coast to coast (with the east coast pummeled by a late season blizzard, while the west coast went full-on summer mode with 80 degrees and sunshine), consumers 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 unpleasantness that might follow– fraud and chargebacks.
With 42 percent of Americans planning to take a vacation in 2017, it’s important for merchants to be on top of their game when it comes to beating fraud. Opportunistic attackers often capitalize on these 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.
The latest threats affecting travel sites (and ways to combat each) include:
- 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, 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.
- 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 (CNP) 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 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 (ISP) addresses, different spending patterns, and testing on small items before going for the ‘big ticket’ items.
- 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, and requesting for 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 get reported, you’re 60-90 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. Avoid chargebacks with a fraud prevention solution like Kount Complete. Detect and shut down fraud in real-time, not 60-90 days after an attack starts—by then, it’s too late.
Here are the 5 capabilities you should look for in a fraud prevention solution to ensure you’re protected against all the dangers of fraud, including Chargeback Lag:
- Dial-in your most profitable chargeback rate
- Decisions in 300 milliseconds using real-time data
- Real-time integration of best-of-breed technologies
- Artificial intelligence plus human intelligence
Remember that many travel sites and bookers are not experts in fraud – and that’s okay, they’re not expected to be. The most essential step you can take to protect your business is to acknowledge any vulnerabilities you have (whether that be chargebacks, friendly fraud, or a blanketed approach to declining transactions) and work with experts to make sure you have a comprehensive system in place that monitors and prevents fraud, without reducing legitimate transactions. Don’t let a subpar fraud prevention system affect your business’ summer sales! Download the white paper: "Today’s Fraud Challenges Facing the Travel Industry."