International Fraud Gangs Targeting Australian Travellers: A Growing Concern

Australian travellers are increasingly becoming the target of international fraud gangs, with alarming data showing that certain travel routes are significantly more likely to be linked to fraudulent activity. A new report from Riskified (NYSE: RSKD), a leader in ecommerce fraud and risk intelligence, reveals that flights departing from Australia to Indonesia are 2.5 times more likely to involve fraudulent tickets compared to the average.

Flights to Indonesia: A High-Risk Route for Fraud

The report, which analyzed Australia’s top 10 destinations by travel volume, shows that flights from Australia to Indonesia are the highest-risk route for fraud. Fraudulent activity includes the use of stolen credit card information to purchase tickets, which are then resold to unsuspecting travellers at discounted prices, often through online forums or even the dark web. The fraud typically involves “buy for order” arrangements, where criminals use stolen credit cards to purchase flight tickets in bulk and later resell them.

Key findings:

• Flights from Australia to Indonesia are 2.5 times more likely to be fraudulent.
• Australia to the United States comes second with 2x the average risk of fraud.
• Australia to the United Arab Emirates has a 15% higher than average fraud risk.

The Growing Threat: Fraud in the Travel Sector

Nicholas Kirtley, ANZ Country Manager at Riskified, explains that fraud in the travel sector is not as widely known outside the industry but is a growing problem that affects both travel providers and Australian travellers. Fraudsters often attract consumers with "too-good-to-be-true" offers, making them particularly appealing to those looking for budget-friendly travel options. However, when these unsuspecting passengers show up at the airport, they discover their tickets are invalid, causing unnecessary delays, cancellations, and even financial losses.

Fraud Gangs Behind the Schemes

Unlike the common belief that fraud in the travel sector is carried out by lone criminals, much of the activity is orchestrated by international fraud gangs, primarily based in countries like Indonesia, China, Russia, and increasingly from Europe. These sophisticated criminal operations target travel routes that are frequently used by Australian travellers, such as flights to Indonesia.

“These activities are organised and very sophisticated,” says Kirtley. “It’s not just a lone fraudster targeting an unsuspecting traveller. We’re talking about international gangs that have the means and knowledge to bypass traditional fraud detection systems in the travel sector.”

Why Travel is a High-Risk Category in E-commerce

When comparing fraud risks across different online purchase categories, the travel sector consistently shows a much higher risk profile than traditional physical goods like clothing and electronics. This is primarily because travel purchases often involve transactions from various locations and regions, making it more challenging for travel providers to distinguish between legitimate consumers and fraudsters. Fraud in the travel sector also extends beyond flight bookings to loyalty points fraud and fake travel rewards.

Airline Reward Points: A Target for Fraudsters

Fraud in the airline rewards space is also on the rise. Fraudsters often target frequent flyer accounts, gaining access through Account Takeovers (ATO). Once inside, they transfer points, redeem them for flights or upgrades, or sell them on the black market for cash. Fraudsters may also manipulate the system by creating fake transactions that trigger the accumulation of loyalty points without any real purchase. These points are then either sold or used to book flights and hotel stays at a fraction of the cost.

How Travellers Can Protect Themselves

While fraud in the travel sector is on the rise, there are steps that both travellers and travel providers can take to mitigate the risk:

1. Be cautious with “too-good-to-be-true” offers: Avoid buying tickets from third-party platforms that seem suspicious, particularly those found on social media or forums.
2. Verify booking sources: Always book directly through reputable travel providers or well-established booking platforms.
3. Monitor credit card activity: Regularly check credit card statements for any unauthorized charges, especially when making online purchases.
4. Enable two-factor authentication: This extra layer of protection for frequent flyer accounts can help prevent account takeovers.
5. Report fraudulent activity immediately: If you believe you’ve been targeted by fraud, contact your bank or travel provider immediately to resolve the issue.

A Growing Problem That Needs Attention

The rise of travel fraud is a pressing issue for both the Australian travel industry and consumers. As fraudsters continue to evolve their tactics, it’s crucial for both travellers and travel providers to stay vigilant and take steps to protect themselves from becoming victims of this growing problem.

For further updates on this issue, travellers are encouraged to stay informed and to make use of fraud prevention tools offered by their credit card providers and travel companies.