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There is a new and growing fraud trend directly impacting travel agents and carriers, which manipulates and exploits weak spots in agents' and carriers' risk management systems. It is important for agents to know how this fast-growing scheme works and what actions agents should take to stop the criminals and reduce losses.
How it Works
A criminal uses a compromised credit card to purchase several tickets in one Passenger Name Record (PNR) from a travel agent. The tickets do not match basic high-risk indicators for fraud: the itineraries do not include high-risk cities/airports, travel is booked far in advance and the cardholder is one of the passengers in the PNR. After the tickets are purchased, the criminal immediately contacts the airline to request that the carrier exchange the agent-issued tickets for new tickets. The new tickets include high-risk cities/airports and immediate departures and may not include the cardholder as one of the passengers.
Some agents are able to identify the fraud because the phone number and address don't match the cardholder, but this fraud may not initially raise a red flag for an agent and by the time the agent is able to review the transaction in more detail and confirm that it is fraud, the tickets have already been exchanged by the carrier. In the end, the credit card number used to purchase the original tickets will eventually be identified as compromised, and the agency issued ticket will result in a chargeback for fraud.
Real Life Example
A fraudster purchased tickets from a travel agency for four people, round-trip, from New York (JFK) to Mazatlan, Mexico (MZT) for travel next month. One of the passengers was also the cardholder. The next day, the fraudster called the airline directly to make changes to the tickets. The passengers are now flying from Lagos, Nigeria (LOS) to Toronto (YYZ), departing the next day. In addition, one passenger in the group is not included in the change (i.e., the cardholder is no longer flying).
In other real life examples, a secondary review of the original transactions by the travel agency, confirmed that the transaction was fraud. The agency attempted to void the tickets but was unable to because they were already exchanged by the carrier and flown by the passengers.
What to Do Next
Review your indicators for high risk and consider placing a transaction in a higher risk category when the following characteristics are met:
ARC's Fraud Prevention team is in the initial stages of gathering all characteristics of this fraud (names, phone numbers, addresses, emails, ticket numbers, etc.). If you have (or think you have) experienced this type of fraud, please contact ARC's Fraud Prevention team at 703-816-8137, 855-358-0393 or email@example.com.
Effective with sales issued on Monday, January 5, 2015 (PED 1/11/15) Azul Linhas Aeréas (577/AD) started accepting UATP as a form of payment through ARC.
Just a friendly reminder—the 2015 annual agent location fee of $205 will be collected for each of your office locations via electronic draft from your designated bank account on January 22, 2015. It will appear on your bank statement as "ARC Core Participation Fee." A separate draft of $205 will be issued for each active agency and Satellite Ticket Printer (STP) location of record as of January 12, 2015. For consolidated drafting agents, only one draft will be assessed for all of your ARC approved locations.
For those agents receiving their Agent Sales Summary report in paper format, the 2015 fee for this service will be $56 per month.
This is a reminder about the agent/CTD transaction fee that is assessed on a quarterly basis. In 2014, the quarterly fee is set at $.017 per transaction. An agency reporting an aggregate of less than 1,000 transactions per quarter will not be assessed a transaction fee. The maximum number of transactions for which an agency can be charged in a quarter is 2.25 million transactions (per entity). A separate debit representing this fee will be drawn against your ARC designated bank account on or after January 22, 2015. Only one draft will be issued for consolidated drafting agents.
ARC MarketPlace commissions are paid during the month following your clients' travel. If you have not received your commissions after that time period, you may send an email to firstname.lastname@example.org and provide the following information:
We are happy to assist you with your ARC MarketPlace commission questions.
ARC Customer Care Center | Tel. (703) 816-8003 | Fax (703) 816-8039 | email@example.com
ARC Corporate Communications | Tel. (703) 816-8525 | Fax (703) 816-8168 | firstname.lastname@example.org