The International Air Transport Association (IATA) is cracking down on payment fraud in the air travel industry.
Payment fraud costs the industry an estimated USD 858 million annually, about USD 639 million of which is borne by airlines and the rest by other participants in the travel value chain, including travel agents, IATA says. That means travel agents, and a few others, bear the brunt of paying USD 219 million (or about AUD 314 million) a year to cover fraud.
While some airlines already use a range of systems to reduce fraud activity in their direct sales, IATA says that its IATA Argus offers “a unique, fully-integrated and automated payment fraud detection and management solution for both travel agents and airlines.
“IATA is committed to helping the industry fight fraud. Our partnership with Ypsilon Net AG brings a modern fraud prevention solution that meets the needs of both airlines and travel agents to reduce fraud and increase the confidence in generating new sales via all available distribution channels,” IATA’s Senior Vice President Financial and Distribution Services, Aleks Popovich, said.
By accessing information available in global distribution systems, IATA Argus is able to detect suspect transactions from as early as the booking request stage, and flag them or even cancel them as appropriate. It can notify the agent or airline of a suspicious booking, and automatically take action to void, suspend or cancel a ticket.
“You cannot segregate fraud occurring on airline direct channels from fraud generated through travel agency or online travel agency channels. IATA Argus combines ease of implementation and cost efficiency in a system that protects all channels effectively and provides full automation,” Ypsilon Net AG chief executive, Hans-Joachim Klenz.
IATA Argus can also integrate systems including, but not limited to, IATA Perseuss and Ethoca and uses the provided information to enhance fraud scoring.
Edited by Peter Needham