Online Fraud 101-Travel Edition

Online Fraud 101-Travel Edition

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by Florian

In this second instalment of our beginner’s introduction to fraud, we focus on travel fraud and the challenges faced by this industry.

Why The Travel Industry is a Target for Fraudsters

We’ve written before about why your industry could be a high target of fraud. And you’ll find the main reason applies to the travel industry. In short, it’s the high resale value of goods that makes it attractive to fraudsters. Whether it’s airline tickets or hotel bookings, the travel industry essentially delivers digital goods which can be sold back for a lot of money.

Combined with the fact that travel industry companies operate with increasingly low margins, it’s easy to see how much damage fraud can do. Especially when it increases losses due to false positives and resource-expensive manual reviews.

Most Common Types of Travel Industry Fraud

There is no shortage of ways in which fraudsters try and extort money from travel platforms. Amongst others, these include:

  • Ticket cancellations to win flight credits: airlines increasingly promote flight credit to attract new customers. Fraudsters game the system by booking flights with stolen credit cards, and cancel them to still be credited the bonuses. They can then resell them or purchase legitimate tickets to be resold later

What Steps Need to Be Monitored by Airlines and Travel Agents?

While a complete end-to-end fraud prevention solution can do wonders, there are a few specific areas that travel industry platforms should focus on.

Transaction Monitoring

Fraud detection is mostly about identifying patterns, and a few of them will appear during the payment process. At checkout, you should focus on:

  • Transaction amount and currency used
  • Types of credit cards: some credit cards tend to be more used by fraudsters than others
  • Geolocation: there are certain at-risk regions around the globe, where fraudsters will log in from to book the tickets.

User Profiling

Getting a complete 360 degree view of who the user will also save a lot of trouble in the long term. This can be done through:

  • IP address analysis: to reveal geolocation, or even whether a proxy, VPN or TOR browser is used.
  • Email address analysis: email addresses can reveal a lot about a user, depending on whether the email address is disposable, from a high risk dromain, or used to register social media accounts. One interesting case uncovered by SEON showed that users in the Brazilian market without social media presence had a 92% chance of being fraudsters.

email analysis to check social media presence

  • Device fingerprinting: can reveal if the same device has been previously linked to fraudulent activity, or if any fraudsters used it to buy the tickets.

“SEON discovered that users in the Brazilian market without social media presence had a 92% chance of being travel industry fraudster.”

Best Tools For Fraud Prevention in the Travel Industry

As previously mentioned, a high risk industry has a lot to gain from a complete end-to-end fraud prevention solution. But there are a few areas that are worthy of particular focus:

  • Machine Learning: Sometimes feeding data into a system and applying rules is not enough. This is why implementing a machine learning module for pattern detection can have tremendous impact on reducing fraud rates. Travel industry-specific data is particularly hard to analyse for humans as it involves points such as departure date, hours to departure, booking class, and more.
  • Complete and flexible system: Your tool should be able to automate processes, but also give fraud managers all the extra help they can get. This can be in the form of custom rules, automatic classification, or even powerful team management options.
  • Strong and capable fraud prevention team: finally, a fraud prevention system is only as good as the people who use it. The machine learning models still need overseeing to ensure the correct rule sets are deployed. Manual reviews and chargeback handling will always need to be done by human to ensure the most accurate results.


Mitigating fraud risk is important in any industry, but it is particularly needed where competition is fierce and margins decreasing. The travel industry faces these two challenges, and combined with the high resale value of its digital goods, it is a prime target for fraudsters.

Luckily, there are enough advanced solutions available that give proven results in the airline and travel space. As machine learning and artificial intelligence tools continue to increase in efficiency, there is little a good fraud prevention team won’t be able to do to reduce fraud, increase margins and reduce resource-heavy manual reviews.

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Communication Specialist

Florian helps tech startups and global leaders organise their thoughts, find their voices, and connect with customers worldwide.

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