Guest Column: Fraud Prevention For Travel Agents, Part 1: Red Flags

In the past six months, I’ve spent innumerable hours trying to track down a fraudster who scammed a independent travel professional out of thousands of dollars.  

The client seemed innocent enough: a doting son who had purchased a pair of first-class tickets to Europe as a gift for his parents. He approved the charge in writing, even sent in a photocopy of his driver’s license. Sounds legitimate, right?

Wrong.

Though our story resulted in a chargeback that should have been indefensible, there were a few boxes left unchecked by the agent. With credit card fraud on the rise, it’s more important than ever for travel entrepreneurs to know how to protect their business.  

What is fraud? 
Fraud is malicious or criminal deception intended to result in personal or monetary gain. In legal speak, it can also be understood as “false enrichment,” meaning someone getting money/not paying for something they should have by pulling a fast one on you, the agent.  

In the travel industry, fraud is commonly perpetrated by “clients” purchasing travel products using stolen credit cards or issuing chargebacks (denying charges on their credit card) for products that they did actually use. Sometimes, fraud can even mean someone breaking into your GDS to book travel products without your knowledge or steal sensitive personal information.

Smells phishy: Red flags to watch for in initial contact
With the advent of the Internet, traditional “walk-in” travel customers are few these days. Fraud, therefore, naturally increases simply due to your inability to meet every client in person. With this in mind, proceed with caution whenever you receive new travel requests from an unfamiliar source. Any combination of the following scenarios should raise immediate suspicion: 

• First point of contact is via e-mail, a form through your website, or a TTY service (for the hearing impaired) 
• Client or passenger name is new to your agency  
• The cardholder’s credit card, driver’s license, or passport can only be faxed/e-mailed because cardholder can never be present at the agency location (tricky for home-based agents, but always ask!) 
• E-mail requests contain obvious spelling errors 
• Caller ID shows the client as non-local, or no Caller ID information is displayed at all 
• Caller claims to be a representative from a GDS or ARC and starts asking for your personal information/credentials  
• Client can only be contacted via phone with a non-local area code 
• Client uses fictitious U.S. address or phone number (Google everything!) 
• Client can’t call you back OR you can only ever leave a message

In the travel industry, fraud is commonly perpetrated by 'clients' purchasing travel products using stolen credit cards or issuing chargebacks (denying charges on their credit card) for products that they did actually use.

Red flags: Fraudulent clients 
Even if the initial contact seems innocent enough, keep on your guard. Other red flags that may reveal themselves during your qualification process. Here are a few of the most common: 

• Client uses a religious/medical title (“Pastor Robert” or “Doctor Smith”) or religious premise (missionary work) to establish credibility or empathy
• Last-minute bookings 
• Highly flexible travel schedule or budget 
• Client doesn’t quibble over the price 
• Client can’t or won’t fill out a credit-card authorization form 
• Client has no local address 
• Flights originate outside the United States 
• Flights are international-to-international   
• Client references airport codes instead of city names (e.g. asking for LAX to LOS instead of Los Angeles to Lagos, Nigeria) 
• Passenger is not the cardholder 
• Client can’t or won’t verify the billing address of the credit card being used 
• Client uses a single credit card to book several routings, travel dates, and passenger last names 
• Client uses multiple credit cards to pay for the trip 
• Client offers multiple credit cards for payment if first card is rejected 
• Client purchases high-priced tickets for a third party (bingo—this was the case with the culprit mentioned above) 

Red flags: Fraudulent access to your GDS 
Not all fraud comes in the form of a sneaky client; some comes from skilled fraudsters gaining access to your GDS or client information. If you are a GDS user and/or have sensitive client information on your computer, beware the following: 

• “Phishing” e-mails containing attachments or links that entice you to click for additional information or to update your GDS credentials/profile (NEVER open attachments or click on links from unknown sources!) 
• Calls from someone pretending to represent your GDS or ARC, requesting your login information or agency credentials like your IATA number 
• Calls from anyone claiming to be in the travel industry requesting access to your client list (for marketing purposes, etc.) 

We believe that when it comes to protecting your agency and your pocket book, paranoia is your friend. Committing the above red flags to memory will drastically reduce your risk of fraud.  

Come back for the next part of our three-part fraud prevention series, where we’ll explore the latest fraud schemes and best practices for fraud prevention.

Emily Peters is the business development manager of Montrose Travel