Surge in attempted fraud is feared by travel groups


The travel sector is braced for a surge in holiday season internet and telephone payment fraud attempts, as financial crime responds to the recession and improved credit card security.

Airlines and travel agent groups have issued warnings before the peak summer holiday period, amid fears that the sector has become a tempting target as it tries to bolster flagging sales but lacks the safeguard of chip-and-pin transaction security.

The evidence of growing fraudster activity highlights financial criminals’ creativity in sidestepping anti-crime measures and turning even grim economic trends to their advantage.

Barry Gooch, chair of Profit, a grouping of companies, regulators and law enforcement agencies set up this year, said fraud was “definitely …. on the rise” during a recession that the Association of British Travel Agents said has driven summer bookings down 5 per cent year on year.

“I don’t want to give the impression that the travel industry are careless,” Mr Gooch said. “[But] the problem is that this year – because it has been very tough – people are less guarded.” Profit and Abta have warned members of potential fraudulent activity during a summer season that is seen as a likely peak for legitimate bookings and fraud attempts.

Kevin Smith, a senior vice-president for Visa Europe, the payment card company, said there had been a “significant increase” in fraudulent activity against airlines, with criminals taking advantage of the confusion of intermediaries populating the travel sector.

He said: “The airline industry is a very, very complex industry, with many, many layers and transaction processors.” One cautionary tale circulating in the travel sector is of an agent that was conned out of about £17,000 through fraudulent bookings of flights to Lagos, Moscow and Dubai. In another high-profile case, 13 people were charged in Maidstone crown court last month with an alleged conspiracy to con Thomas Cook out of £235,000 by using compromised credit cards to book holidays to Jamaica.

The activity around the travel industry highlights the truth of the old saw that attempts to curb financial crime often end up escalating or displacing it.

The sector is suffering partly because fraudsters are finding the security of face-to-face chip-and-pin card retail transactions too hard to crack and are migrating instead to industries that sell high-value products over the phone and internet.

Apacs, a finance industry body, estimates that “card not present” frauds against the travel industry rose from £27m in 2007 to £29m last year, making it the third most defrauded of the industries that it monitors.

Law enforcement agencies have been also paying growing attention to travel, with Scotland Yard closely involved in the Profit initiative and the City of London police working with Abta on investigating fraud.