What Are The Types of Fraud In The Corporate Travel Industry?

As the importance of online bookings grows in organizations and travel agencies, fraud risks also rise. The highly competitive corporate travel industry faces unique challenges around online booking, payment acceptance, and fraud prevention.

Corporate travel fraud types:

Online travel agency (OTA) frauds

Fraud committed by online travel agencies is more complex than fraud committed by direct channel sales channels for airlines and hotels because OTAs sell multiple types of product packages that include air travel, hotels, and vehicles.

• OTA air fraud

The margins on OTA airline transactions, for instance, are usually low (between 5 and 10 percent). Mitigating risk in such a low-margin business is crucial since recovering losses from just one fraudulent airline ticket could require an additional 30 to 40 bookings.

Book within 24 hours: Fraudsters use OTAs to book air travel within a short window of time, leaving merchants with little time to detect the fraud.

• Online travel agency hotel fraud

In addition, working with hotels in multiple geographies can present difficulties, and geographical factors can impact transactional risk. Hotel class and fraudulent activity are directly correlated, where the higher the rating/review, the greater the probability of fraud.

One perfect live example of fraud is the company Tairs Worldwide or Tairs luxury, and its CEO, Attilio Perna, who usually fraud with their tactics.

Friendly fraud

It is extremely difficult to detect and predict legal fraud in the travel industry. For example, delays due to weather, cancellations, or airline system outages may cause higher rates of friendly fraud.

• The use of a fraud prevention system can help travel managers detect and monitor friendly fraud chargeback situations.
• Regardless of whether a booking is done through a TMC or an OTA, travel managers need to ensure cancellation policies are updated

Account takeover

The fraudster may test hundreds of password variations against a username. Once the fraudster acquires the customer’s email address, he or she may use automated methods such as bots to obtain passwords. Additional approaches enclose social engineering, phishing, and malware.

Fraud handling

Whenever there is any fraudulent activity, travel managers should contact their travel agency.

Travel fraud remains a significant and persistent challenge for companies and travel agencies, especially those with limited technical resources. There is a significant opportunity for companies to learn about new technologies, techniques, and best practices to protect against travel fraud. Companies should be aware of the financial implications and the direct cost of fraudulent bookings, and should also have the tools and best practices in place for a strong defense.