How Digital Travelling Frauds can be Limited by ID Verification?

Usually, folks think that the finance sector like banks attracts scammers and fraudsters. But the fact is no industry is prone to financial crimes. The recent term that enters the businesses is digital travel frauds disrupting.

The reason for this is the travel industry is now a trillion-dollar sector. Travel and tourism added USD 9.25 Trillion to the global economy. Furthermore, this sector has a very high rate and value of digital reselling. Although travel websites operate at a low margin, the cost of fraud is still high. American Hotel & Lodging Association (AHLA) reports the loss of $5.2 Billion because of fraudulent and misleading hotel bookings.

Types of Digital Travelling Frauds

Bookings Through Stolen Debit/Credit Cards

Not only the travel sector but all other businesses like e-commerce or cabs riding are suffering from debit/credit card scams. Fraudsters book airline or bus tickets through stolen card information. The card number and personal data of the user are accessed through phishing, data breaches, or spyware installed on a system. This information is traded on the darknet or social media platforms with the least regulation. The criminals book tickets with minimum departure duration. So that even if the company detects fraudulent activity they can’t cancel the ticket.

Fraudulent Ticket Cancellations

Most online travel agencies (OTA) or airlines offer ticket cancellation services, but scammers use this as a medium of fraud. Tickets bought from stolen card data are canceled to get a refund. A separate bank account is utilized for the compensation amount. Then the money is used to purchase legitimate tickets.

Fake Travel Agencies

This type of digital travel fraud targets both customers and businesses. Scammers develop fake or fraudulent travel agencies over the internet. They sell online tickets with heavy discounts. Customers unknowingly buy these. And when they arrive at the airport or bus station, they find out that there was no booking in their name. In this scenario, the airline loses the customers’ trust and market reputation. Social media groups are mostly used for these purposes and most of the cases report on the holiday season. When there is a high number of people desiring for travel and a low number of available tickets.

Identity Verification – The Solution

Most of the popular types of digital travel frauds have been discussed above but what’s the solution for this. How can a business prevent fraud? The best prevention and protection service is identity verification.

Identity verification is the procedure of confirming the customer’s identity through multiple checks. Currently, Know your customer (KYC) can verify an individual’s identity efficiently. KYC is commonly run by financial institutions for identity and payment fraud mitigation.  It’s like a traditional customer verification where a bank employee verifies the identity and other documents of the customer for account opening. KYC is an extensive and accurate process involving the below types of verifications:

  • Biometric Verification
  • Document Verification
  • Age Verification
  • Address Verification

An online travel business can opt for a plan of its choice and need. As age verification is not necessary, it can go for the blend of biometric, document, and address verification. The process is automatic and done by online AI-powered software along with OCR for data extraction. This KYC process integrates with the sign-up and checkout process. Further, a customer requests to open a user account on a travel website. It should perform KYC on him. During the checkout process, his card should undergo document verification. 

Process of online KYC:

  1. While signing up for an account, the customer enters his data into the website. It can be full name, birth date, residential address, and gender.  These details built a digital customer’s digital identity on that website. 
  2. This step performs verification of the customer’s documents. For this, the customer has to upload a photo of an identity document. It confirms the earlier information. It captures real-time by a mobile phone’s camera. it extracts particular data from the image through character recognition software and then affirmed.
  3. For biometric verification, it captures a live picture of the customer’s face by the KYC software. The customer image on the document is cross-match with the live capture selfie.
  4. If the information and photo match, the customer verifies and is given access to other services. For credit card verification, the image of it must upload.


Travel businesses, online most importantly can have a better fraud prevention program through KYC services. Moreover, KYC providers have the service of a video KYC where all verification is through a video call. Fewer frauds and scams give rise to more legitimate bookings and a higher profit share in the market.