As technology advances and progresses, so do the methods by which fraudsters attempt to steal clients’ and travel agencies’ money. You might think that a travel agency has better protection than a regular customer but if the travel agency is not using the highest-level protections available to them with solutions like eNett or TTS Consolidator, then they are just as susceptible as any other potential mark. This is why it is important to know what the frauds are in the travel industry and how to combat them. Likewise, as the travel industry grows and develops, so does the lucrativeness of fraud. Many reports cite that fraud costs the travel industry upwards of 21 billion dollars a year.
So what are some of the big frauds and how can you use technology to protect your travel agents, your travel agency, and ultimately your clients from these kinds of frauds?
Travel tech has brought us many wonderful inventions as well as significantly streamlined and automated processes which used to be time-consuming or laborious. However, fraudsters know that those very things which sometimes make it easier for a travel agent to do their work is the same travel tech that can be exploited to make a fraudster’s job easier as well. A perfect example of this is using fake hotels.
Here is how this fraud works: the fraudster will create an imaginary hotel either using a simple online website builder or perhaps a slightly more elaborate one that includes a burner cell phone number where individuals can even make reservations, get room availability, and pay over the phone. But no matter how the fake hotel is created or operated, the fact is it is still not real. The fraudsters will then use stolen credit card numbers and book through online travel agencies. The online travel agency then makes a payment to Hotel Not There.
Unsurprisingly, they receive chargebacks but by the time a travel agency realizes this imaginary hotel has already closed for business, they have left with the travel agency’s money leaving the travel agent high and dry. This is such an easy fraud to exploit as online travel agencies oftentimes handle these kinds of payments automatically meaning that if a fraudster had a sufficient number of stolen credit and debit cards, they could potentially hit a travel agency for many thousands of dollars in false booking fees.
Fortunately, the solution to this problem is a fairly simple one and that is simply travel agencies, whether they’re online travel agencies or in-person ones, need to double-check their suppliers before making payments. Doing things like checking for a business license, checking online Google Business reviews, or even doing a simple Google Street View of the supposed hotel location to make sure there is a hotel there and that the hotel matches up with the information given can go a long ways towards protecting assets. With just a little bit of leg work, a travel agency can save itself thousands of dollars normally lost to fraud.
Hotel price spike
Another fraudster favorite is the price spike. This one is more difficult to deal with as it involves collusion between the fraudster and the hotel. What happens is the hotel will raise all of its room pricing, then the fraudster will book hotel rooms using stolen credit cards through an online travel agency making the travel agency now responsible for paying the chargebacks of the higher pricing. If a travel agency or others in the travel industry demand client information to find out how the hotel managed to book imaginary people, the hotel conveniently happens to have all the false documentation it needs and it can avoid being labeled as fraudulent although they are in cahoots with the thieves. This again is another place where it’s very important to check your suppliers and also note the patterns between price increases and fraudster activity which is a dead giveaway for this kind of scam.
eNett and TTS Consolidator
Fortunately, there are things that you can do to protect your travel agency from fraud: by using advanced technologies like eNett or TTS Consolidator. These solutions dovetail and work together seamlessly. eNett is an online payment method designed to help facilitate payments within the travel industry by using virtual account numbers to turn cash payments into a virtual digital account number via MasterCard which can then be used and accepted as payment anywhere MasterCard is.
This means that true credit card numbers are never being used and only randomly-generated artificial accounts are. This helps cut back on credit card fraud and using the virtual account numbers backed by MasterCard helps ensure a greater level of protection for clients and the travel industry. eNett then fits seamlessly in with TTS Consolidator to help facilitate online booking in a way that helps protect travel agents and the travel agency from fraud while simultaneously ensuring greater efficiency and safer transactions.
With the integration of eNett in solutions like TTS Consolidator, IATA agencies can reap different benefits like simplified reconciliation, reduced risk of fraud and supplier default, accelerated payment processes, amongst other benefits.
The battle between fraudster and cybersecurity is an eternal struggle but with the advancement of travel tech, the travel industry wising up and learning how new frauds operate, and how to circumvent them by using advanced fraud protection technologies like eNett and TTS Consolidator, travel agents and their clients can have peace knowing that their financial information is secure.
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