How to Prevent Account Takeover for Buy Now Pay Later Companies

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.
Travel fraud is an ever-growing issue as fraudsters continue to abuse the online aspects of the industry, focusing on the ticketing aspect. Airlines can see revenues slashed due to forms of bonus/loyalty abuse as well as bookings made with stolen credit card details, which can lead to chargebacks.
The issue can extend beyond the directly impacting the airlines too, some fraudsters will create websites to offer fake flights and holidays that ultimately aren’t offered by the airline and can cause reputational damage.
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.
As well as this, airlines dependancy on modern payments technology, both onflight and online, leaves them exposed to fraud as many of skills fraudsters have developed will be applicable to a travel scenario.
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Travelers should be vigilant when booking tickets. You can also educate your users about the best practices by following the five steps highlighted below:
There is no shortage of ways in which fraudsters try and extort money from travel platforms. Amongst others, these include:
As a recent report claims stolen credit card information can be sold for as cheaply as $14, it’s no surprise that fraudsters use them all the time. The tickets bought are then resold on darknet marketplaces, or even in the open to unsuspecting users.
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.
Potientially as part of a triangulation fraud scheme, bookings made via a fake travel-agency websites can give a fraudster opportunity to both take money directly from a victim but also maximize damages by using their credentials on other flights/holidays. If a victim doesn’t check their bank account, when a person looks into the booking or worse turn up to the airport to fly, they will be rejceted and have no access to refunds as the fake agency will likely be dissolved.
An ever-present issue across the eCommerce space are account takeovers, fraudsters gain access to a persons account details via data breaches or by other methods such as phishing then pose as a genuine customer to make unauthorized transactions.
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.
Fraud detection is mostly about identifying patterns, and a few of them will appear during the payment process. At checkout, you should focus on:
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:
“SEON discovered that users in the Brazilian market without social media presence had a 92% chance of being travel industry fraudster.”
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:
Last but not least, look at the following techniques to implement in your tools to help combat travel fraud immediately:
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 travel fraud prevention team won’t be able to do to reduce the travel industry fraud, increase margins and reduce resource-heavy manual reviews.
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Stolen loyalty points, stolen/fake payment details (both online and in flight).
ATOs and stolen/fake credit cards are two of the most common but also it’s worth considering fake websites that are setup to impersonate their site, with losses to both potential revenue and brand reputation.
Since people were not travelling much or using their airline account during the pandemic, fraudsters turned their attention to cracking loyalty accounts.
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