This comprehensive study compares fraud attack rates for airlines, credit card issuers and card types, purchaser cities, billing cities, and much more!
Download the 2020 Online Travel Fraud Benchmarking Report Now
The global air travel industry earns over $850 billion annually, with approximately 25% of that business transacted online, making it a lucrative target for fraud rings. Travel fraud costs companies more than $10 billion per year. It consists of dozens of fraud schemes, including fraudster travel agents who purchase tickets with stolen credit cards and resell tickets on the grey market. These fraudsters behave like viruses, feeding off their hosts and adapting to thrive in the face of new “vaccines,” i.e., new decision rules.
As an Online Travel Agency’s (OTA) sales increase, so do the number of fraudulent purchase attempts it faces… unless the OTA has a machine learning fraud detection solution in place to eliminate fraudsters. Still, that solution only works if it doesn’t cause friction for legitimate customers
In this benchmarking study, Fraud.net used actual transaction outcomes across its Collective Intelligence Network to compare fraud attack rates across many dimensions.
Key findings include:
- Online Travel fraudsters follow the money. Fraudsters focus on higher-priced tickets, producing a higher “return” for the same level of activity. This is embedded in variables such as credit card types – more fraud on cards with higher maximum balances (e.g., Black Cards, Platinum Cards, and Corporate Cards) – as well as ticket prices.
- Location matters. Some cities have 20%+ fraud attack rates for purchases made within the city, and over 40 have fraud rates of 6%+. Fraud rates are correspondingly higher for specific flight routes, airports, billing country, and even credit card issuer country
- Interactions between variables are complex. For example, for airlines, there is a 60% correlation between average transaction amount and fraud attack rate. However, billing location and flight routes are also fraud signals – nearly 15% of transactions originating from Jakarta were fraud attacks. These are non-linear interactions between fraud signals, and sophisticated fraud detection techniques are required to approve legitimate transactions while thwarting fraud.
Some interesting benchmarks include:
- Turkish air has the highest fraud attack rate among all airlines, and Delta has the highest rate among US-based carriers.
- The Dominican Republic is a hotbed of fraud activity, with 3 of the 10 routes with the highest attack rates including SDQ and credit cards issued in the Dominican republic having the highest attack rate.
- Transactions with billing addresses in India and France are 7.3x more likely to be fraudulent than those billing to United States addresses.
- 15% of transactions for flights from Las Vegas to Los Angeles were fraud attempts.
Download the report now to see more benchmarking rankings:
- Airlines, airports, and flight routes ranked by fraud attack rate
- Purchaser cities and billing countries
- Credit card issuers, issuing country, and credit card type
To learn more about Fraud.net, contact a specialist today.