The amount of online payment fraud occurring in the airline-booking industry is dropping, new research suggests.
In a survey of 142 airlines it conducted between Nov. 17 and Jan. 31, Cybersource Corp. found that their combined fraud losses associated with air fares booked online last year dropped by 17.7% compared with 2008, to $1.4 billion from $1.7 billion, the last time Cybersource conducted its airline fraud survey.
Cybersource attributes some of reduction to increased use of fraud-detection tools. These include computer “fingerprinting,” which tracks a computer’s activities, and other automated screening products that reject bookings if they suspect fraud, including security products from MasterCard Worldwide and Visa Inc. Airlines surveyed say they used an average of 7.3 fraud-detection tools last year compared with an average of 5.8 in 2008.
Airlines booking tickets online for less than three years experienced higher fraud rates, higher manual review rates and higher reject rates than did more experienced airlines, the survey found. For example, airlines with more than 10 years of online selling experience manually reviewed an average of 15% of their bookings, while those selling online for less than three years reviewed an average of 53% manually.
Ninety percent of the airlines surveyed said they had no major plans to add fraud-management staff to help manually review fraud in bookings, Doug Schwegman, CyberSource director of customer and market intelligence, tells PaymentsSource.
However as their revenues rise after a business lull caused by the recession, airlines should invest in more automated technology to combat fraud, he suggests.
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