Ai Video: Curbing loyalty fraud with aplomb

26^th August, 2019

#ATPS

Airlines need to proactively monitor their loyal shoppers’ membership accounts since the problem of loyalty fraud is on the rise. If on one hand airlines are offering more earning and redemption choices than ever, it also means that the overall loyalty earning and burning lifecycle has opened new avenues for fraud.   

“From a loyalty fraud standpoint, there is a lot of demand (for stolen loyalty currency among the fraudsters or in a marketplace on the dark web),” says Kevin Lee, Trust & Safety Architect, Sift.

This is because over a period of time, prices for such items (stolen credentials, miles, points etc.) even though they fluctuate a bit still they are going up in value. Data breaches are a big issue, and a lot of sensitive information is being sold.

There is a motivated seller out there plus there is a motivated buyer there too to cash in on the stuff, said Lee, who added that airlines or the originators of miles or the loyalty currency tend to suffer a lot in such cases.

A risk-averse mindset for controlling fraud, be it for fraudulent transactions or loyalty fraud, is commonly associated with rule-based systems. Machine learning technologies are emerging as an astute option to secure accounts. The efficacy of machine learning, especially real-time machine learning, can be explored for account protection. Rely on both supervised and unsupervised machine learning to comprehend both the historical patterns of use, as well as identify anomalies.

It is vital to keep a vigil on accounts for anomalies to effectively notice the behavior of genuine and fraudulent customers. Airlines should analyze user behavior throughout the entire journey- including account creation and login, any account activity and also at the point of transaction such as redemption of points.