Travel frauds force tourism, hospitality, and airline sectors to implement efficient con prevention measures by integrating ML-powered IDV services.
Tourism is expected to contribute over $5.8 billion in 2021, making it a major contributor to global GDP. Criminals are taking advantage of travel firms by claiming insurance benefits and making large one-time payments. Digital bookings, online purchases, and pre-boarding identification verification have made the travel industry a prime target for travel Frauds .
Since the advent of cutting-edge technology, criminal threats have appeared in the travel sector. However, airlines and other travel providers need reliable identity verification technologies to compensate for the recent uptick in fraud. This article further discusses major travel frauds and their prevention measures.
Prominent Fraud Risks in the Travel Industry
Fraudsters now appear to be legitimate travellers, creating a new challenge for the tourism industry. They fabricate documents, take advantage of loyalty/bonus programs, self-book using compromised accounts, and utilise stolen credit/debit card information to avoid identification checks. As a result, legitimate tourists have their rights violated, and the businesses that provide these services are put at risk. This article comprehensively analyses common types of travel frauds, their potential victims, and possible solutions.
Travel Expense Scams
Companies that send their staff on frequent business travels are the primary targets of this scam operation. Each company is responsible for its costs throughout the tour. Additionally, it pays workers for any out-of-pocket expenses. However, dishonest people will make up bills and invoices to submit as legitimate expenditures. The following fraudulent paperwork practices are also associated with reimbursement;
- Submit a fake invoice that sounds legitimate
- Attempting to hide one’s spending by labelling it as that of a recognised business category
- Falsifying journeys receipts to report inflated travel expenditures
- Modifying bank records and fraudulently obtaining additional funds.
Measures to Counter Criminal Intentions
Criminals who perpetrate travel frauds often use sophisticated photo editing programs like Photoshop to fabricate official documents. In addition, they take advantage of the company’s budget by taking less expensive flights and using the savings to buy things like concert tickets and beer mugs. The manipulation of travel expenses is one of the most difficult to detect forms of travel frauds.
Incorporating document verification technologies powered by machine learning can aid firms in preventing the misuse of funds. The OCR data extraction system will resolve any data inconsistencies. Similarly, apps that use mathematical algorithms to analyse expense reports critically can help spot travel frauds.
Passenger Insurance Fraud
In 2021, a guy was jailed as he attempted to consume fake paperwork that he had used to submit phony insurance claims. This imposter applied for medical treatment costs, and the disbursal amount was calculated to be around £22,122. Furthermore, this is not the only case; insurers providing reimbursement for journeys often face travel fraud. Criminals fabricate KYC documents and produce false financial statements to deceive insurers. This type of travel fraud further involves the following false claim schemes:
- Pretending to have lost valuables and demanding increased charges for things that were never there
- Fake claims of losing a bag that is present with the traveller
- submitting fictitious medical documentation to support a trip cancellation
- False insurance claims and travel fraud also involve creating injuries that travellers claim to have sustained while on their tour.
Payments with Stolen Credit/Debit Cards
For the tourism industry, travel frauds come in various forms, such as using stolen credit/debit cards to book tours. Criminals either impersonate banking officials to directly obtain customer information or buy it from the dark web. KYC verification is essential in both situations, not because it is a responsibility but rather because it will help confirm that the individual making a purchase is the real cardholder.
Criminals pay at the last minute so that lodging establishments, travel companies, and other service providers won’t have time to cross-verify information. AI-powered IDV solutions monitor passengers’ presence in real-time to prevent travel fraud. Furthermore, tourism companies can deter travel scams with face verification, instant cross-checking, liveness detection, and ongoing monitoring.
The travel industry needs to stay ahead of criminals to provide individuals with convenient, secure, and risk-free services. Tourism businesses must therefore implement effective con prevention procedures to combat scams. Countermeasures against travel fraud can be more effectively identified and detected by using AI technology. As a result, travel agencies can guarantee risk-free and secure travel.