Clearsale Blog Posts
By Ana Carolina Alves, Product & Marketing Manager at ClearSale
Fraud is a phenomenon already known by retailers around the world, especially in non-presential sales. An unidentified attack at the appropriate time can ruin business (and dreams).
To combat fraud, we must always keep in mind that fraudsters are like companies in many ways: they seek profitability and, and, therefore, keep an eye on the ‘market demands’ (i.e. the desired items of potential buyers) and monitor their inventory levels; assess the risk of their ‘investments’, and even form associations to exchange the best practices, among other initiatives.
One of the segments targeted by fraudsters is the travel one as it offers high and rapid profit opportunity. With this in mind, we added four highly important pieces of information to understand how fraud in this context differs from the others.
1- Fraud is less risky for the fraudster
When fraud involves the delivery of a product, the fraudster is exposed in some way, because he will need to ensure its receipt, either by the local delivery to which he has access or by getting partners from the delivery chain.
In the travel segment, it is not necessary to change the address data of the buyer, as the reservation is received by email. As in most cases, the fraudster will not be the passenger, he will be less exposed and will neither be committed to an address or people related to him nor show up at the shipment place.
This also makes the fraud prevention more complex because the fraudster needs to change fewer data on the registration of the user. Moreover, it is very common to purchase authentic tickets to third parties in this segment (parents buying for children, friends buying for friends, etc.), with the change of email to send the ticket reservation so that the passenger can have the travel documents. That is, there is less evidence to distinguish authentic transactions from fraudulent transactions than there is in the traditional e-commerce applications.
2- The ‘resale’ happens before the fraud
A common retail fraudster focuses on products which are the best combination of high value and selling speed, such as mobile devices, for example. In this sense, he needs to succeed in the fraud and receive the product in order to make a profit.
But in travel, the situation is reversed. The fraudster needs to know the date and time, which he will sell in order to profit from the fraud. This often involves first selling a ticket and then performing the fraud to obtain it. In other words, even if the passenger is prevented from boarding, the fraudster will have already profited from the sale.
3- The passenger doesn't always know that his ticket is the result of a fraud
There are reports of fraudsters posing as travel agencies that have special prices to attract customers and, as a result, many passengers arrive at the airport without even imagining who participated in a fraud. Many of them understand that they have paid to a travel agent for his tickets and have the right to board.
This demands a lot of skill in the customer service from the airlines in order not to cause negative impacts in their own image. On the other hand, if well done, this contact can generate important inputs on the fraudster and help preventing further fraudulent activities.
4- As a matter of fact, everything is a question of timing.
In the common retail, the fraudster may even choose an express delivery, but the period always starts counting from the moment the purchase is approved, which involves the release of credit and fraud authentication. This approval time is usually fixed (or with a fixed limit), causing little impact on the success of the fraud.
In the purchase of tickets, the logic is reversed: the flight has a day and a schedule to happen, which means buying in advance increases the chances of the individual being defrauded notice the debit from his card, report the fraud and cancel the ticketing.
Even having already profited from the ticket, the longer he can keep up successfully, more customers will have no need to change ads, “attendance’ place, etc. It is worth remembering what we have previously mentioned: fraudsters operate like businesses and seek for higher profitability.
For all these reasons, fraud in travel segment needs special attention. Given the attractiveness of the segment, the fraudsters often innovate in the type of attack, finding new points of weakness at all times, demanding that the solution for fraud prevention solution have the same dynamism.
Therefore, generic prevention solutions tend to be less effective, as you are slower in detecting and reacting to purchasing behavior changes. It is important to use platforms that implement multiple approaches in detecting fraud, involving different technologies and intelligence that they can adapt to the specific scenario of each client, such as artificial intelligence, behavior analytics and supported monitoring.
To maintain low levels of fraud without impacting the revenues is not an easy task, but the choice of the appropriate platform can bring a healthy balance between these variables. It is worth investing in the search for the best partner for the sustainability of your business in order to guarantee more peace of mind in daily activities.