Travel companies suffer a higher rate of card fraud than the average UK business as a result of the explosion in card-not-present transactions.
An industry conference in London yesterday was told that overall card fraud is falling, but card-not-present transactions have ballooned and retailers invariably bear the cost of the fraud loss.
Tony Mooney, business development director of merchant acquirer First Data, said: “As an industry, travel suffers more fraud than average. A lot of travel is sold remotely and that is when the problems with fraud occur.”
Mooney told the Elman Wall travel directors conference at Arsenal’s Emirates Stadium in London that card fraud typically takes place online or over the phone. He said: “These are the safest methods for a fraudster.”
He warned: “If you are defrauded online, it is likely you will pay,”
The value of card-not-present fraud to UK business hit £227 million last year – almost two-thirds of the total card fraud and 236% up on 2001. The overall cost of card fraud fell over the same period.
There are no figures for card fraud specific to travel. However, Trevor Sears, external UK counsel to IATA and partner at law firm Davenport Lyons, confirmed Mooney’s warning. He said: “Travel suffers more than other sectors at the moment.”
Fraud makes up a fraction of the total value of card transactions, however. Total transactions were worth £412 billion last year. Mooney said fraud accounted for about 0.12%.