The travel and hospitality industry is undergoing rapid digital transformation, but this advancement has also created new opportunities for complex fraud schemes. With the industry losing an estimated $11.2 billion to payment fraud annually, implementing robust travel fraud prevention strategies has become a business imperative.
understanding the evolving threat landscape
Modern travel fraud extends far beyond traditional credit card theft. Account takeover incidents have surged 65% year over year, while chargebacks now affect 2.3% of online travel transactions.
Key areas of vulnerability include:
- Online travel booking fraud prevention: This encompasses payment fraud, such as the use of stolen credit cards for booking flights and hotels, and promo abuse, where fraudsters exploit discounts and coupons.
- Card testing fraud: Fraudsters often verify stolen credit cards by making small purchases — such as seat upgrades or baggage fees — usually between $5 and $25. After verifying that a card is valid, fraudsters move on to making expensive fraudulent bookings.
- Loyalty programme fraud in travel and hospitality: Loyalty points are a currency. Fraudsters target these programmes through Account Takeovers (ATO), gaining unauthorised access to customer accounts to steal or redeem accumulated points. They also engage in points laundering, selling stolen points on the grey market.
- Fake documentation: Predators can create counterfeit documents that allow them access to infrastructure, activities, or services. Commonly faked documents include International Driving Permits (IDP), which serve as official translations of your driver’s license into ten languages, facilitating lawful driving in foreign countries. Fraudulent entities frequently produce and sell counterfeit IDPs through online platforms. A traveller purchasing a fake IDP not only results in financial loss but may also expose them to legal penalties and significant travel disruptions if discovered by authorities abroad.
core travel fraud prevention strategies
A robust fraud prevention framework must be proactive, intelligent, and integrated across the customer journey. Businesses can adopt the following approaches to strengthen their defences:
leverage AI-powered travel fraud detection
Artificial intelligence and machine learning represent the most significant advancement in combating fraud. Unlike rigid rule-based systems, AI models analyse thousands of data points in real-time, including device fingerprinting, behavioural biometrics, and transaction history, to identify subtle, anomalous patterns indicative of fraud.
implement multi-layered verification
A single layer of security is easily breached. Strengthen your defences by implementing step-up authentication for high-risk activities. This could include:
- Requiring two-factor authentication (2FA) for logins from new devices or for high-value redemptions
- Cross-referencing billing addresses with Card Verification Values (CVV) seamlessly, so that it does not disrupt the user journey
secure loyalty programmes proactively
Given their high value, loyalty programmes demand specialised travel fraud prevention strategies. Key measures include:
- Monitoring for bulk point transfers or rapid redemptions from previously dormant accounts.
- Analysing redemption patterns for inconsistencies, such as a user suddenly booking multiple first-class tickets to unusual destinations.
building a comprehensive prevention framework
Organisations must adopt systematic approaches to travel fraud prevention strategies, beginning with a thorough assessment of current vulnerabilities.
- Secure payment gateways with advanced encryption and real-time validation services (like AVS) to protect sensitive customer data during online transactions. Compliance with Payment Card Industry Data Security Standards (PCI-DSS) ensures robust security measures, including firewalls, access controls, and regular security audits.
- Address verification systems verify that billing addresses match card issuer records, detecting fraudulent transactions by flagging discrepancies.
As digital transformation reshapes the travel sector, the responsibility to safeguard customer journeys extends beyond traditional fraud management. Modern travel fraud prevention must combine AI intelligence, real-time data analytics, and cross-industry collaboration.
Ultimately, effective travel fraud prevention is not just a technological implementation but a cultural shift. It requires collaboration between finance, technology, security, and marketing departments.
how can Infosys BPM help in travel fraud prevention?
Infosys BPM fraud detection and analytics solutions help protect your business from evolving risks. Using advanced technologies and deep industry expertise, we deliver end-to-end safeguarding against fraud, from e-ticket scams, synthetic identity fraud, to payment triangulation schemes. Our solutions are designed to identify and prevent fraud throughout the customer journey, ensuring a safe and seamless experience during their booking and travel.
Frequently Asked Questions
Q1. How can large travel and hospitality enterprises operationalise AI-driven fraud prevention across the end-to-end customer journey?
Enterprises can embed AI and machine learning at key touchpoints—account creation, search and booking, payment, check-in, and loyalty redemptions—to score risk in real time, trigger step-up authentication for high‑risk events, and route suspicious cases to specialised fraud operations teams. Infosys BPM can help design and run this operating model as a managed service, combining fraud analytics, rule management, and continuous model tuning to keep pace with evolving attack patterns.
Q2. What specific fraud typologies can Infosys BPM help us mitigate in online travel and loyalty ecosystems?
Beyond generic payment fraud, Infosys BPM can support detection and mitigation of card testing, synthetic identity misuse, ATO-led loyalty fraud, promo and voucher abuse, friendly fraud/chargebacks, and triangulation-style booking fraud. This typically combines device fingerprinting, behavioural biometrics, advanced scoring models, and playbook-led investigations to reduce both hard fraud losses and operational leakage.
Q3. What measurable outcomes can a global travel enterprise expect from partnering with Infosys BPM on fraud detection and trust & safety?
Typical outcomes include reduction in fraud losses and chargebacks, lower manual review rates, improved approval rates for genuine bookings, and better protection of loyalty value at risk. Additionally, enterprises gain centralised visibility into fraud trends, standardised processes across regions and brands, and the ability to scale new products and markets with a consistent, compliant trust and safety framework.
