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„Wonderful Modern World“ Fraud and Electronic Tickets Gisela Golombowski-Hofmann Lufthansa Revenue Integrity FRA EC/R. E-Tix Fraud – What Can Happen. Important – an e-tix can NOT be stolen during a burglary or other type of robbery BUT Other types of fraud will continue
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„Wonderful Modern World“ Fraud and Electronic Tickets Gisela Golombowski-Hofmann Lufthansa Revenue Integrity FRA EC/R
E-Tix Fraud – What Can Happen • Important – an e-tix can NOT be stolen • during a burglary or other type of robbery • BUT • Other types of fraud will continue • New types of fraud will occur • Fraud will be on higher intelligence level
Fraud Types – already detected • Fraudulent ticket purchase in internet sales/payment fraud (credit cards, debit cards) • Theft of identity • Travel Agents Fraud (e.g. Fake Agents, Reservation Manipulations, Bustouts) • Fake/Altered Itinerary Receipts • Discounts • Validity • Flying without Ticket • Misuse of time gaps • “Creative” usage of tickets
Fraudulent Ticket Purchase in Internet / Payment Fraud (Credit Card) • Besides the already known scenario – fake/compromised cards are used to purchase tickets via Internet, more and more cases of „friendly fraud“ are showing up. • „Friendly Fraud“ means – the legal cardholder refuses payment on his card with arguments that • another family member has taken the card out of his purse and purchased the ticket without his knowledge and approval • he/she did not fly at all, the airline has lifted his ticket by error for another passenger • This type of fraud is „supported“ by self service check-in machines and lack of passport controls for domestic travel or within the Schengen area, when no identity check is performed at boarding control.Prove of fraud is difficult if not impossible in cases where cardholder and family member announced as the one who caused the problem, have identical family and given names.
Fraudulent Ticket Purchase in Internet / Payment fraud (Debit Card) • Debit Cards are used in some European Countries for payment. Such payment may be run with „EC-CASH“ system with PIN Code, where the card is swiped through at a PIN-PAD Terminal. In this case the bank takes a kind of liability for the payment. • Debit cards can also be used without these PIN-PAD Terminals. Either in face-to-face transaction where the customer signs the charge form, or for internet sales. The account of the cardholder will be debited later, but the cardholder has a timeframe where he can call back the money without giving a reason or written statement for such recall of payment.
Prevention of Payment Fraud • Credit Card Payment: • Face to Face Transaction • 3D Secure System for Internet Sales • Security Code Verification • Address Verification • Debit Card Payment: • -Acceptance only in face-to-face transaction together with passport (BUT – in many cases these security procedures are in conflict with sales and marketing) • In general – most airlines do not accept internet sales as last minute sales and depending on the value of tickets, address verification is done.
Risk Area – Internet Sales • Since Internet Sales are non face-to-face sales, there are meanwhile many software applications in place, which allow early detection of most attempts for fraudulent ticket purchase. • This problem is well known in the industry and many steps are already taken.
„Theft“ of Identity • In general this means that somebody uses the e-ticket of another person, or misuses his/her form of identity/flight data to access the e-ticket. There are several possibilities: • the passenger himself leaves the data open on a place where anybody can get hold of the data • „friendly fraud“ where the passenger gives his data to another person and later complains about „unauthorised“ usage • Mistakes at the check-in in case of common names – e.g. John Smith etc – in connection with NON VOID e-tickets • BUT • There are also cases where the passenger himself used the ticket, but claims later that he never flew and the airline made the mistake to take his electronic ticket for another unknown person.
Travel Agent Fraud • Fake Agents: • Somebody creates an Internet page, offering as „Travel Agent“ Service to Passengers – extra cheap tickets • When this agent is contacted, they take travel details and „confirm“ everything to the passengers • Before the ticket is issued, they request the money – but not via CC payment, only cash or bank transfer
Travel Agent Fraud • With the money this person disappears and the passenger has no ticket at all • OR • The fake agent has ordered the ticket via the airlines internet page using a fake CC for payment
Travel Agent Fraud • In other cases, internet pages of genuine agents are copied with new contact details, but giving the image to passengers that they have reached a real travel agency.
Travel Agent Fraud - Bustout • Bustout is a known scenario • Where a travel agent prepares reservation some time in advance • Collects the money from passengers • Issues the tickets over a weekend • And disappears with the money • As there is no stock limitation on electronic tickets, the damage can be extremely high, much higher as it was in the „paper-world“. • Airlines have to install in the own system warning systems • ARC provides velocity system as warning
Altered Itinerary Receipts • Correct Itinerary Receipts are altered by passengers or travel agents • To save rebooking fees • To extend validity/cut minimum stay requirements • Have an upgrade „free of charge“
Fake Itinerary Receipts • Fake Itinerary receipts are produced • by fake travel agencies to give the image to passengers, that they got a reservation and ticket • by other persons who want to make money with „arranging for tickets“ • These fake agencies/persons either produce such Itinerary Receipt themselves • or • they have a sample Itinerary Receipt which they copy into a word file and change the data according to the dates and reservations requested by their customers
Discounts • Passengers/Travel agents book the ticket with a discount, where the passenger in fact is not eligible for • Youth fare • Children fares • Seaman fares • And other discounts • At self service check-in machines no eligibility control is performed and if the airline has no security features in the check-in, e.g. not allowing Child fares at self service check-in or additional check at boarding control, such passengers fly successfully on a discounted fare they are not eligible for
Validity • If no validity check is performed at self service terminals, passengers may use their restricted special fare ticket outside the validity frame as long as the electronic ticket is open for usage in the database. • To avoid such misuse, a system has to be in place which controls at time of check-in • if the flight data on the ticket and the flight data of the PNR match • if the fare is a restricted fare • and if necessary advise the passenger to contact the ticket desk, where the ticket can be controlled and necessary charges can be collected.
Flying without Ticket/Misuse of Time Gaps • Passenger is accepted on a flight, but the flight coupon of the electronic ticketis not uplifted because • time gaps are used to void the ticket after passenger is boarded • 72 hours time frame for sending „lifted/boarded“ message to the validating carrier these 72 hours will allow the agent to void/ refund the ticket via BSP link, knowing that in many cases BSP link has no direct connection to the airlines e-tix database. • Validating Carrier or Travel Agent changes the status to void, suspended or refund as they asume ticket is not flown or fraud is detected, e.g. payment fraud or the company paying for the ticket does not want the passenger to use it • Customer calls his Travel Agent while going to the aircraft, telling him „I am not using my e-tix“ and applies for refund • electronic ticket is shown in the PNR as „active“ ticket, but the ticket was refunded by the agent via BSP Link
Flying without Ticket • System failure – The electronic ticket is not sent to the operating carrier, or sent with corrupted data – and depending on the bilateral agreement, an „emergency handling procedure“ is in place – but depending on the knowledge of check-in staff, the „emergency handling“ is used everytime, when the e-tix is not found without verification if there is an e-tix existing. Basically due to time pressure at the airports. System failure will be used as excuse for the mistake. - Passenger is checked in correctly, but due to system outage the Coupon status is not changed and remains „open for usage“ in the database which allows to use it a second time or get a refund after usage.
Flying without Ticket • Mistakes at through check-in by agents and handling agents: – passenger is checked through, the agent forgets to „uplift“ the e-tix coupon for the onto flight but the passenger gets a boarding pass. - Passenger is checked in by the agent/handling agent for the onto flight according to reservation, but the e-tix is issued in a lower class and system warnings are „overruled“, or some handling systems will not give any warning that booked flight class and ticketed class do not match • Wrong double lift of coupons Passenger is holding a ticket for flights from A to C via B and the agent/handling agent makes through check-in, but „stapels“ all coupons together for the feeder flight A to B
Flying without Ticket • Interline communication problems - e-tix is not transferred in time to the operating OAL - system of the ticketing airline does not communicate correctly with the of the operating carrier - OAL generates an e-tix, the e-tix is visible for the operating carrier, but the operating carrier has no access to the e-tix or only limited access to the first flight coupon, but not for the onto flight coupon as this coupon is transmitted to the station of the onto flight • Missing upgrade voucher not always, interlining with mileage upgrades can be handled with electronic vouchers. Paper voucher are attached to the boarding pass, but taken away by the passenger. If there is no entry on the boarding pass, the passenger can use the voucher again and again
„Creative“ usage of tickets • This is the same problem as it was in the paper world • Agents issue the e-tix with incorrect baggage allowance, e.g. PC instead of weight, or higher free baggage allowance – to give a „goodie“ to their customer • Frequent travellers will know after a while, that there are time frames in the interline communication – change of coupon status. They will misuse these time frames to fly out of sequence by • - making reservation on different airlines • claiming at check in that they flew the sector before on OAL, but threw away their boarding pass • using the 24 hrs no-stopover rule to have a reason why they check in bags locally
Creative Ticketing/Mileage Fraud • A very simple trick, where most of the times customer and agent work together: • Passenger purchases a longhaul high value e-tix at the travel agency for departure the same day or next day. • Passenger checks in at the airport for the flight at a self service terminal without baggage and receives a boarding pass • Passenger goes back to the agent the same day, so the agent can void the e-tix and passenger keeps the itinerary receipt/passenger receipt of the e-tix, and gets the money back • he then turns in the boarding pass stubb together with the copy of the Itinerary receipt at the mileage desk, asking for the miles for the flight „because the automated mileage accrual did not work“. • If no check is done against the passenger list of the flight, he will earn miles without flying and at no cost.
