Last year, we shared that Forter’s data showed that fraudsters had zoomed in on travel. In fact, our research indicated that travel was being attacked at about double the fraud rate compared to typical trends during the rest of the year. We thought that was an unusual feature of 2023, the result of various specific trends that we wrote about at the time.
We thought that this year, travel would be less of a hot pick for fraudsters. We were wrong.
To be more precise, we were technically right but, in essence, wrong. Travel isn’t being attacked at double the rate this year — it’s being attacked at about 1.8x. So that’s, you know, better than double. But not by that much.
So why are fraudsters still so into travel?
Travel is Hot for the Fraudulent Fraternity
A Bankrate survey found that this year, more than a quarter (27%) of Americans want to travel so much that they’re willing to take on debt to fund it. That indicates that although spending might decrease in other areas, experiences are essential for many.
Of course, fraudsters follow the money. If many people are focused on travel, they’ll focus on travel as well. Suppose there’s more spending on travel, entertainment, and dining out (as the survey indicates). In that case, fraudsters might pay more attention to those booming industries than others, putting extra pressure on travel.
At the same time, many consumers still feel financially unsettled, as reflected in their willingness to take on debt. That leads to an interest in good deals, which for fraudsters means further opportunities. Nothing is more tempting for a fraudster than tricking consumers into paying for an offer that’s “too good to miss” for goods bought with stolen payment methods.
The Stress of Last-Minute Travel
As with hospitality bookings, last-minute travel reservations are more likely to be fraudulent than bookings made for further out. In the case of travel transactions, last minute — meaning within 48 hours or sooner — is almost 3x more dangerous than reservations made at least one week into the future.
On the one hand, they are often less common in travel than in hospitality, which makes it easier for them to flag and investigate if there are suspicious signals.
On the other hand, last-minute travel reservations are still fairly common, and in many cases, a legitimate traveler making a last-minute booking does not have the time, patience or flexibility to jump through many extra hoops or take a call trying to verify their identity. This puts a real burden on fraud teams for both accuracy, to avoid annoying good travelers as much as possible, and sensitivity to make any verification as fast and easy as possible.
Personalized Protection
Verifying that the person behind a transaction in travel is legitimate is especially likely to be challenging for fraud teams. Signs that sometimes signify suspicious behavior in other contexts are common for people who are traveling, such as:
- Unusual IP address
- Unusual shipping address
- Unusual product choices
- Sometimes, a different device
- Different device/cyber intelligence (location, time of day, languages installed etc.)
For this reason, fraud teams must focus on the whole picture presented by an identity. If this is a returning customer, does their behavioral profile match their past behavior? If not, does it match the typical behavior of people who belong to their buyer persona?
Bringing in additional sources of data can be very valuable. Even if a customer is new to you, it’s unlikely that they’re new to the internet. Being a part of the wider fraud-fighting community is a huge asset.
Context is also key. You know what legitimate behavior looks like on your site or app, broadly speaking. Is this in line with what you expect from legitimate customers or fraudulent ones?
The more you can personalize your protection to distinguish legitimate customers from fraudulent attempts, the more you can use that understanding to smooth shopping for good customers and even offer promotions or benefits based on their behavior, profile, or past preferences.
Fighting fraud in travel is a challenge, and it hasn’t eased as much this year as we’d expected. But doing it right can not only protect a business from fraud but also help it level up the experience for good travelers.
Doriel Abrahams is the Principal Technologist at Forter, where he monitors emerging trends in the fight against fraudsters, including new fraud rings, attacker MOs, rising technologies, etc. His mission is to provide digital commerce leaders with the latest risk intel so they can adapt and get ahead of what’s to come.