travelers and airlines in the fraudsters' focusCurrent Trends in Airline Fraud
Fraudsters have a long history of targeting airlines, taking advantage of the fact that while airline tickets have high value to customers, they simultaneously provide very low margins to the airline industry due to a combination of various costs and other factors, especially for international carriers.
BIG IS NOT BENEFICIAL
Airline fraud is one for which detection most often requires a face-to-face contact between staff and fraudsters, who are most likely to be detected at the boarding gate. Fraudsters have consequently recently shifted most of their focus to middle tier or regional airlines, since these have much laxer security.
FRAUD TRENDS 101: ID THEFT
The recent rise in airline fraud has been made possible by the also recent rise in account takeover, or to use a more familiar term: identity theft.
There are a number of factors responsible for the current significant increase in identity theft, especially the move major markets have made towards EMV card standards, and the wide availability of social media data to fraudsters, coupled with phishing and malware attacks on unsuspecting cardholders.
Fraud Trends 102: Rules Can Be Bent
Security measures and features employed by airlines are many but they all have their limits. As in, for example, rule-based fraud detection systems.
These will certainly produce results up to a point, but as they are still relatively static by nature, their rules can be circumvented once their range and reach have been tested and discovered by fraudsters.
The rule set can be altered, but this also means the system has to be updated repeatedly and often, as fraudsters adapt to its changes, which in turn increases the cost of maintaining such a system.
Fraud Trends 103: Machine Learning to the Rescue
Luckily, human security experts are about to receive significant help in the form of machine learning. Simply put, machine learning in this case means that computers can be taught to observe user behavior and, by taking note of various indicators, including the way users move their mouse or use their touch screen, help the fraud detection system tell apart genuine users from fraudsters.
Fraud Trends 104: 3DS Secure Is Secure
There is also the 3DS: 3-domain secure, a security protocol currently implemented by Visa and Mastercard. The protocol is set up to prevent credit and debit card fraud by requiring the use of data from three sources: the seller, the buyer and the card issuer. The 2.0 version of 3DS is coming in 2019 and is expected to further increase security and safety, thereby helping combat fraud. These improvements include more cardholder data being incorporated in the model and using device and time zone identification to confirm a buyer's identity.
For airlines, this will represent a significant improvement in fraud detection because now their own customer data can be combined with card issuer data - and 3DS 2.0 is expected to be especially useful to previously mentioned middle tier and regional airlines, both reducing their expenses with regards to manual review and decreasing the overall amount of fraud they will fall victim to.