Use Technology to Fight Fraud

ABTA recently revealed that losses resulting from fraud averaged nearly £3,000 per individual consumer in 2015, which added up to £11.5 million stolen from unsuspecting holidaymakers and other travelers in 2015, up from £2.2 million in 2014. There are numerous steps that consumers can take towards fraud prevention, such as buying from reputable companies only and being aware of phishing emails.

For travel companies selling to consumers it’s not only important to ensure you are protecting your customer’s details, you should also take steps to protect your business against fraud.

Travel companies exposed to fraud when paying suppliers

In their 2015-2016 Global Fraud Report, global provider of risk solutions, Kroll, reveals that 75% of companies in the transportation, leisure and tourism sector are affected by at least one type of fraud. The loss suffered by companies in this sector as a result of fraud equates to 0.9% of revenues which is slightly higher than the normal level of loss – 0.8%. The sector reported the third highest rate of corruption (15%) and vendor and procurement fraud, at 20%, is above the average of 17%.

The method chosen to pay suppliers can be a key factor putting travel companies at risk of fraud. Those companies relying on checks, corporate credit cards/lodge cards or bank transfer to pay suppliers for bookings made could be at increased risk.

Check payments are most risky as readily available technologies mean it can be easy to forge a check, they can easily go missing without you realizing and details written on checks could be altered before they are paid in. If you do not carefully manage and store checks you could easily be exposed to check fraud.

Paying suppliers by corporate credit card or bank transfer is less risky than paying by check as there are controls in place to detect and alert you of unusual usage. However, if your card or bank details are not transmitted or stored securely and fall into the wrong hands you could be exposed to fraud.

Virtual Card Numbers help protect against fraud

OTAs and other travel companies are taking advantage of Virtual Card Numbers (VCNs) to help mitigate the incidence of fraud. Virtual card transactions are run through the same networks as traditional credit cards, yet they have a one-time use secure 16-digit card number that comes with built-in controls on the administration end. And since no banking information has to be exchanged, valuable data isn’t exposed to fraudsters—or anyone, for that matter—for unauthorized use.

In addition to each transaction being given its own VCN, this payment method allows transactions to flow through a paperless, automated and more streamlined process, requiring minimal or no manual touch points. VCN payments give you built-in measures of payment security:

• Contains the same info as plastic cards: the standard 16-digit card number, an expiration date, and a CVV number
• Doesn’t rely on a physical card that can get lost, stolen, or copied
• Works within precise transaction controls, set by the travel company, including specific dollar amounts, timeframes, and merchant or supplier or merchant categories
• Sent through the same trusted network as all major credit card transactions

Additionally, no banking information needs to be exchanged and/or maintained between the buyer and supplier, reducing the risk of data compromise.

Learn how VCNs help reduce fraud 3 Reasons Virtual Credit Cards Will Become A Leading Corporate Travel Payment Option in 2016