Confronting Card Fraud in the Global Travel Industry

During the last ten years service suppliers in the travel industry (airlines, train companies, shipping lines, online travel agents) have progressed from taking their first baby steps in online payments to a point where online transactions now represent the vast majority of all ticket purchases. This period has seen significant change right across the sector. The industry has faced an extraordinary battering from card fraudsters and has had to reorganize rapidly to face this unexpected threat.

Looking back, we can now see that there were certain key developments which collectively led to a reversal of fortunes for the initially successful fraudsters. Businesses are now back in control of their payment operations and fraud has been reduced to manageable levels.

Collaboration between Competitors

By far the most important development has been the ability for fraud analysts to exchange information between each other in an informal manner firstly in meetings and secondly in secure online forums. There are two main types of information:
1) structured data such as names and emails that need to be cross-checked against a database and,
2) tips and best practices that can be shared informally.

Some of the meetings and online forums are for members only. Others are open to verified fraud analysts and professionals from any accredited organisation. For an individual who may be the only fraud-fighter in their organisation and with no-one else nearby to offer advice, these forums are like a life-support machine.

Collaboration between Corporates

At a strategic level, the travel sector has created an industry-wide body where executives can meet and co-ordinate action on both a regional and global level. There is a regular program of working groups that takes place at venues across Europe, Asia-Pacific and elsewhere in the world.

Key to the success of both personal and corporate collaboration is that people from different organizations continue to meet regularly face to face. Bonds of trust, once formed, can last a long time online but occasional meetings in person re-inforce and accelerate that trust.

The Technology Collaboration

The next step in industry-wide collaboration is sharing data. When the working group is small this can be done via email messages but once groups start to grow, automation is vital. Groups will need to establish steering committees to choose a neutral technology supplier who develops the various online forums and databases.

The data-sharing technology itself has to be cloud-based and highly secure. It has to enable businesses to submit and share suspected fraud data, legally, while always retaining ownership of the data. In this way a business can remain completely in control of its data, even after it has shared it. The database must be developed with a high degree of participation and input from working fraud analysts so the screens and layouts blend naturally into the operational workflow. This increases efficiency and improves decision-making.

Collaboration with Partners

Merchants who provide travel services rely on a vast network of partners to oil the wheels of the industry and make everything work. Among these partners are payment service providers, software suppliers, banks, card schemes, industry associations, legal entities, national police forces as well as international law enforcement agencies.

The travel industry had the foresight long ago to involve all of these bodies in the global war against card fraud. Over the last two years all of these organisations have been mobilised in a number of concerted drives to break up fraud gangs and arrest their members at the moment of committing crime. Hundreds of perpetrators have been charged with offences including people smuggling, drugs trafficking and international prostitution. In many cases the secondary crimes are far more serious than the card fraud which first brought them to the attention of the authorities.

All this collaboration has allowed the travel industry to present a truly joined-up, united front against fraud gangs. The gangs themselves are becoming increasingly sophisticated and technology-capable. It’s vital that the industry continues to make and strengthen connections with its partners to counter this ever-present threat.

Cross-Industry Collaboration

A very exciting prospect now is for the travel industry to work with entirely different business sectors to fight fraud. Criminals don’t recognize industry boundaries, so why should we?

Of course the scale of operations will be significantly increased. There will be problems and challenges. But the lesson of the last ten years is that we must all collaborate more in order to isolate criminal gangs. If we do not, they will exploit the gaps between us and take the initiative. Then we will find ourselves cut off, surrounded and struggling to catch up. That must not be permitted to happen.

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Author: Jan-Jaap Kramer