The Association of Tour Operators of Quebec (ATOQ), the Association of Canadian Travel Agencies (ACTA), and the Canadian Association of Tour Operators (CATO), have released the results of a 2018 Q1 fraud survey.
The survey was carried out using LogiMonde's Quick Presse distribution system, where, upon clicking an embedded link, 26,179 subscribers were reached.
Just over 500 respondents (327 English 183 French) completed the survey which was designed to gather general feedback from frontline staff.
A few key findings from this survey include:
- Main source of fraud: air tickets at 78 per cent
- Fraud frequency: eight per cent of agents affected
- Main fraud defense strategy: refuse sales
- Fraud analysis tools: 88 per cent manual
- A growing frustration among front line agents about lack of fraud prevention tools.
"These survey results clearly show the fraud challenge travel agents are facing on a daily basis," said Wendy Paradis, president, ACTA. "I am happy that we are able to work with our travel industry partners, the ATOQ and CATO, to build solutions which will create a more secure environment for us all."
The survey results indicate that 8 per cent of agents have suffered a case of credit card fraud within the last 12 months.
Airlines are moving aggressively to protect their revenues by implementing fraud protection tools for their direct to consumer sales channels. Another big driver of the increase in online fraud is the implementation of the EMV chip and pin in the USA. Since physical card counterfeiting is increasingly difficult, fraudsters shift to the online environment to maintain their profits.
What does fraud look like?
Booking airfare is where most fradulent activity takes place. The 2018 study of Global Airline Online Fraud Management indicates that on average 3.8 per cent of all online reservations are cancelled for suspected fraud.
Airline tickets are the single biggest source of fraud at 78 per cent and are followed by vacation packages at 17 per cent.
Given the workflow procedures used by the traditional “bricks and mortar” travel agencies, there are almost no fraud prevention tools available on the market today. Protection is almost entirely dependent on the agents own “street smarts” and their ability to sniff out trouble. Almost 88 per cent of respondents indicated that either the owner/manager would review the file or that another manual process was used.
Staying ahead of the game
More than 63 per cent of those surveyed stated that fraud awareness campaigns are being carried out in their offices. Since that still leaves 37% who are not given formal training, it's easy for fraud to slip through the cracks.
According to Statistics Canada, in 2016 there were just over 140 million passengers enplaned or deplaned in Canada; this level of activity makes control difficult and provides criminals with many opportunities for fraud.
While the current fraud environment is challenging, there are solutions on the horizon which should improve protection for the Canadian travel distribution network. Credit card companies like Visa and MasterCard want both the credit card holders and the merchants accepting cards to be able to operate in a secure environment.
Starting in late 2018 and coming on strong in 2019, the travel industry will have the option to benefit from the newest version of the fraud security software (3DS 2.0) being made available by the major credit card brands.