Avoiding Payment Fraud within the UK Travel Industry

A case study to help eliminate credit card charge-backs by the Fraud Intelligence Network and the National Fraud Intelligence Bureau.

This case study is based on over 50,000 booking records from 52 leading travel companies within the UK. The participants included accommodation providers, airlines, financial institutions, hotels, holiday lettings, online travel agencies, retail travel agencies, and tour operators.

Payments made by credit and debit cards accounted for the vast majority of fraud transactions.

The data has been analysed in this report, with detailed commentary. The key findings are that t ravel fraud has moved
online and is most effectively perpetrated remotely. Fraudsters are generally well organised working collaboratively
and rarely at tacking a single t ravel company at any one time so that businesses which share fraud data are in a better position to resist attack than those working alone.

Common indicators exist in fraud bookings that identify high risk factors these can be used to build a ‘matrix’ of threats which can be used to reject attempted fraudulent bookings. Our expertise allows us to provide travel companies with a practical and commercial approach to protecting revenue in the context of today’s challenging marketplace.

This report explains the issues in a straightforward way to help you to find pragmatic solutions so that you can form an effective counter fraud strategy.

The travel industry is one of the largest sectors within the UK by turnover. Long ago fraudsters recognised the vulnerability of this vast industry to fraud. The move from shop transactions to remote ones has made companies more vulnerable and increased the value of successful fraud attempts.

Travel companies have invested in counter fraud software of the 3rd party verification type, and adopted 3D secure in order to tackle fraud. However many find that the only way of effectively reducing fraud is to set the rules for high risk transactions very high so that the company rejects a large number of good bookings causing loss of revenue.

In many cases payment fraud experienced by the industry derives from Organised Crime Groups that are continually testing and probing company’s defences in order to find a way through. Once successful these groups share the knowledge with other groups. Systematic sharing of fraud data is essential if the industry is to effectively tackle fraud as this case study demonstrates.

Case Study Results

Card Transactions – Briefing Note