How to Protect Your Business from Travel Booking Fraud

Unfortunately for travel providers and their customers, the travel industry is a prime target for fraudsters. From credit card fraud to identity theft and fake bookings, travel providers are grappling with increasingly sophisticated fraud methods. Without effective fraud prevention and detection strategies in place, travel businesses risk losing thousands each year. 

Travel booking fraud is on the rise despite leaps in fraud prevention and detection technology. Speaking at the ECTAA Travel Payment Summit in Brussels earlier this year, a fraud prevention specialist at a major European tour operator said that travel companies are facing new threats, including voucher fraud. “Fraud is always shifting. You won’t be able to eliminate it, and the more you try, the less you sell,” she said. 

Another executive noted that strong customer authentication (SCA), which requires customers to use two forms of ID for online payments, has made card fraud more difficult in the UK and EU. With targets on their backs, travel companies must be proactive about fraud detection and prevention.

Travel Booking Fraud: Red Flags to Look Out For

Identifying potential travel booking fraud as early as possible is vital. Some red flags to watch out for include:

• Unusual booking patterns, such as sudden spikes in bookings from a specific region or multiple bookings made in quick succession, may point to fraudulent activity.

• Invalid payment methods, like declined or suspicious credit card transactions, may indicate fraud.

• Inconsistent customer information, such as changes to customer names and contact details, suggests potential identity theft or fake bookings.

• Last-minute bookings may be genuine customers going on a spontaneous getaway, but fraudsters tend to book at the last minute to reduce the chances of the card being reported stolen or the victim realising they’re being scammed.

Best Practices to Follow to Reduce Travel Booking Fraud

While it’s impossible to eliminate it completely, there are steps you can take to reduce fraud:

Secure payment gateways

Implementing a secure payment gateway will reduce instances of fraud—think of it as the first line of defence. Because fraudsters don’t tend to have access to physical cards, as they tend to steal data online, they may not have all the information required to make a booking through a secure payment gateway successfully. That’s why Trust My Travel uses a PCI Level 1 payment gateway, the most stringent PCI compliance level, to protect payments from fraudsters.

Identity verification

Implementing robust identity verification processes will help you reduce travel booking fraud. This typically involves SCA, which requires customers to provide two forms of ID and two-factor authentication, where customers provide an additional verification code sent to their registered email address or mobile number. But, for larger travel companies, it may also involve third-party identification verification services to perform advanced identity checks.

Fraud detection

Invest in fraud detection tools to analyse booking patterns, identify anomalies and flag potentially fraudulent transactions. Fraud detection tools have various capabilities, including transaction monitoring, user profiling, risk rules and risk scoring. In some cases, they may use machine learning to recognise patterns in thousands of signals to defend against almost all types of fraud schemes.

Fraud prevention

The good news is that there are also steps you can take to reduce the likelihood of fraud occurring in the first place. Using secure payment gateways, using secure booking systems, implementing SCA and manually reviewing high-risk bookings will help you keep instances of fraud down. But that’s not all—it’s also important to conduct employee training to help your staff members recognise common fraud red flags.

How Trust My Travel Protects Your Travel Business

Trust My Travel was created to protect travel providers and their travellers from financial loss. One way we do this is through our payment fraud detection and prevention system. Here’s how it works:

Monitoring system: Our fraud monitoring system flags suspicious transactions based on the characteristics of the card or cardholder.

Dynamic settings: Dynamic fraud settings based on your traveller’s location protect your business from international fraudsters.

Rule settings: Subscribers benefit from specific fraud rule settings, such as transaction velocity checks, developed over years of processing travel bookings.

Fraud specialists: Our dedicated fraud specialists handle fraud and chargeback cases, saving you precious time that you can spend doing what you do best: running your business.

Protect your business with our all-in-one financial protection and processing solution, which also ensures UK and EU package travel compliance. Contact our team today.