Guest Editorial: Beating the credit card fraudsters

Airlines' plan to show card fraudsters the exit takes off

A quite extraordinary revolution has been taking place in our skies in the last few years. And it's the good guys who are getting the upper hand, writes Ciaran Nagle. International crime has been growing rapidly over the last couple of decades, according to all the research.

And it's no surprise that one of the industries where crime has been accelerating the fastest is one which by its very nature involves much crossing of borders, air travel.

But air travel has attracted not just any old criminal. It's a very particular type of law-breaker that's decided to pick the pockets of this industry: the credit card fraudster. Credit card fraud is on the rise again after peaking in 2008. Security controls introduced at that time had a very positive effect. But fraudsters are again adapting their methods to the new online environment.

48% Increase in International Card Fraud

What's interesting now is the difference between national and international fraud growth. In Europe, total card fraud is netting criminal gangs €1.5Bn annually. And in the UK alone card fraud against merchants is up 4% to €130m since 2013, according to Financial Fraud Action which is the body co-ordinating the fight against fraud for the UK's financial services industry, Europe's largest. But card fraud from the UK against international merchants is up a massive 48% to €75m! If we take what's happening in the UK as an example of a general trend - and Europol believes it is a general trend - it clearly shows that criminals see huge opportunities outside of their own countries. Clearly, crooks are happy to travel, at least with their fingers.

It's easy to understand why fraudsters have been able to get away with their deceitful habit for so long. Police forces and criminal justice systems tend to be organised along national lines and are focused on domestic problems. International crime only gets attention when it involves terrorism or huge amounts of drugs or money.

So when you have crime that crosses national boundaries involving no violence and only a relatively small amount of money - the price of a plane ticket - it's seen as a thorny problem that's hardly worth solving. Until now.

Just look at the all-too-real complexity of a typical fraud case and you can see why it's such a headache for crime fighters.

Credit card data issued in Country A is stolen and used for a flight booking purchased in Country B for a passenger in Country C booking with an airline based in Country D for a flight with a partner airline in Country E ending in Country F. Add to this that the airline in Country D may use a bank based in Country G.

So where does the crime take place? In which country should the fraudster face charges? And how do you gather evidence from a cross-border crime trail that will be accepted by a national court?

The Beginning of the Fight Back

In the early years of card fraud, airlines looked upon fraud as a minor nuisance, a flea bite. It was easier to refund the occasional airline ticket to an innocent victim than to incur the costs of setting up a department to combat it.

But as instances of card fraud grew it could no longer be ignored. Airlines began to keep records of names and email addresses associated with bad bookings. Analysts were employed to monitor bookings and check a random sample against the bad bookings list.