Given the significant disruption caused by the COVID-19 pandemic, fraudsters could seek to take advantage of the pandemic to target airlines with new and refined tools and techniques.

Erik Knoester, Managed Risk Analyst at Cybersource, shares five key payment fraud trends and how to combat them.

Cybersource and Amadeus have been working together for a number of years to help equip the global travel ecosystem with the capability to deliver strong customer authentication and help protect against fraud, without compromising on payment experience.

Given the significant disruption caused by the COVID-19 pandemic, fraudsters could seek to take advantage of the pandemic to target airlines with new and refined tools and techniques.

With this in mind, we recently had a fireside chat where we discussed some of the challenges of fraud management, and what travel businesses could do to help mitigate the risk of fraud.

You may request access to the video of the fireside chat by following this link.

Here are the five key fraud trends that airlines may face and actions they could take to help protect their business and their customers:

1. Targeting vouchers two ways

Vouchers issued for canceled flights are targeted by fraudsters during account takeover attacks, where a fraudster books a flight several months ahead, then cancels and requests a voucher. They then redeem it for another flight, assuming less scrutiny for a voucher-based booking.

To help avoid this, airlines could create voucher profiles in their screening solution to compare the original and voucher-paid bookings, to better reveal inconsistencies that may indicate fraud.

2. Fake online travel agencies

Fake online travel agencies (OTAs) may pop up offering flights with pandemic-related discounts. These ticketing scams often involve fraudulent purchase of tickets for resale to unsuspecting travelers, which can have financial implications for airlines, customers, and card issuers.

Airlines can aim to help educate customers to beware of these fraudulent deals, which can often seem too good to be true. Airlines may wish to be more vigilant in checking the email addresses associated with ticket purchases, as terms like 'COVID' and 'discount' could indicate a fake OTA.

3. Account takeover & loyalty points at risk

Despite fewer bookings, some airlines have reported high volumes of new customer account registrations. The concerns can arise where these accounts have already accumulated a large number of loyalty points which, when these accounts are fraudulent, are often acquired from legitimate accounts.

These ‘fraudulent’ accounts may be used once air travel picks up and the resale value of tickets rises. Meanwhile, genuine customer accounts may have been compromised.

A solution that guards against account takeover should also protect against the fraudulent setup of new accounts, helping prevent further issues down the line.

Loyalty fraud can also put legitimate customers’ trust at risk, regardless of whether fraudsters redeem stolen loyalty points for flights or retail goods. To help protect customers' accounts and keep loyalty points safe for use once travel is back on the agenda, airlines could consider using a specialized solution that monitors account creation, login, and modification attempts.

4. Exploiting fee-free flight amendments

Removal of flight amendment fees reduces friction for customers changing flights, but fraudsters may also advantage.

Fraudsters may book flights several months ahead, assuming the transaction is less likely to be flagged by fraud screening rules. Once the transaction is approved, they change the booking to a flight leaving within a few days, assuming there is no screening of amended bookings.

Airlines may therefore wish to be conscious of screening amended bookings to better help identify changes that may indicate fraud.

5. Machine learning false positives

Airlines whose fraud screening solution depends solely on machine learning (ML) may experience an increase in false positives when buying patterns shift unexpectedly. In particular, quarantine announcements can cause a spike in last-minute one-way flight bookings as people rush to get home.

Before the pandemic, such bookings would have been correctly flagged as high risk, because last-minute one-way bookings fell outside the norm. But we've seen that sometimes that's not always the case today due to the last-minute introduction of travel restrictions.

Airlines may want to consider adding human insight to their fraud screening practices to help recognize changes in genuine customer behavior.

Conclusion

During these challenging times, airlines shouldn't hold back from seeking external fraud management support. Boosting their own teams with additional expertise can help airlines to better protect their customers and their business from fraud.

Erik Knoester, Managed Risk Analyst at Cybersource / www.cybersource.com

Article first appeared at amadeus.com