This modern economy, heavily hit by the COVID-19 pandemic, is suffering from depression and it might take years for it to recover from it. Many people have become jobless and many businesses were shut due to the loss.
Fraud in this economy is something no business can afford, especially one of the worst-hit industry, the travel industry. Borders closing down resulted in a major loss for airlines, and the rise n the travel scams made it worse. What the travel industry requires is the digital solution of identity verification to avoid all sorts of travel scams.
With this blog, let us discuss travel scams and how age verification helps the travel industry to cope in this modern economy.
Travel Frauds and its Types
Finextra report states that travel and tourism provide 10.2% of the global GDP. However, fraudulent activities cost around USD 21 billion per year to the industry. It is expected that the figure will increase up to 20% resulting in a loss of more than USD 25 billion.
Here are some types of travel scams listed below:
- Identity theft and Chargebacks
A chargeback occurs when the bank transfers the transaction on the claim of their client that their credit card information was stolen. However, chargeback fraud occurs when the client makes a false claim asking for the money back for the services that they acquired.
The travel industry will have to face the consequences if and return the money if they have no proper proof of identity verification process.
Identity verification is also required to ensure that the industry does not end up providing service to the identity thief. Due to the rise in identity theft, many businesses have become a victim of it and the travel industry has also faced this type of fraud.
When they perform a proper identity check, they can ensure that the customer is legit and avoid any chargebacks or other losses.
- Money Laundering
Money laundering occurs when criminals try to hide their original source of money. Since they cannot lavishly spend their illegally gained cash, they must cleanse them through different methods of money laundering. Some of the methods include the travel industry. Taking money out of the countries one of the major money launderers and this is why the travel industry must be extra vigilant of any travel scam that might involve the physical transfer of the illicit funds out of the jurisdiction.
Hotel businesses are most commonly used as shell companies bu criminals. Sometimes travel agencies have deals with hotels and restaurants for excellent tourism and travel experience. They must ensure the legitimacy of the business they are dealing with to ensure that they are not getting involved with any illegal businesses. Sometimes criminal use hotels to hide their illicit funds and they must also verify their clients properly to ensure that they are not involved in illegal actvities.
- Travel Agent Fraud
This is one of the most common travel scams. Travel agent fraud occurs when fake companies start to sell fake tickets to people. When people show up with fake tickets, the airlines have to compensate in order to keep up their image and to ensure good customer relations. This can also mean a loss for the travel industry.
- COVID Test Verification
Now the new regulations require the travel industry to verify the COVID test of each passenger before onboarding them. If they fail to do so, they might get penalties from the regulatory authorities trying to contain the spread of the virus. However, people submit fake COVID test to manipulate the system. This is why they must have a solution for COVID test verification.
In order to avoid travel scams, it is important that the travel industry apply proper identity verification solution. There are now AI-powered identity verification solutions available that can verify the identity of the passenger in no time. The digital solution can verify the identity and authenticity of the identity document through:
- Face Verification
- Document Verification
- Address verification
- Digital COIVD Pass
Since the solution is AI-powered, it is fast and accurate and the travel industry can be secured by this.
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