Airlines losing millions to fraudThe biggest losses are from credit card fraud

23 April 2007

 

A plane in the sky

One in five airlines have admitted cases of internal abuse of passengers' personal details, a survey on aviation fraud revealed today.

It also found that 7 per cent of carriers said workers had fraudulently used identities of the airline's passengers.

The survey from professional services firm Deloitte and the International Association of Airline Internal Auditors also discovered that there is now an increase in the number of airline employees diverting frequent flier points to family and friends.

But despite the fact that fraud is costing airlines more than £300 million a year, around 60 per cent of airlines have no anti-fraud programme in place, do not perform frequent fraud risk assessments and have no process to track or record fraud.

Counterfeit tickets

More than a third of airlines discover fraud ‘by accident’ and the survey found that low-fare carriers are the hardest hit.

The biggest losses are from credit card fraud, while counterfeit tickets, false baggage claims and cargo theft are also among the problems airlines face.

The average airline is losing £1.5 million a year to fraud, with four in five of world carriers which responded to the survey experiencing fraud in the last 12 months.

Budget airlines had three times more cases of fraud than scheduled carriers, while charter airlines had the fewest fraud problems.

Credit card fraud

Credit card fraud accounted for around 60 per cent of all cases, costing airlines an average of £500,000 a year, with no-frills carriers the biggest sufferers.

Mike Maddison of Deloitte, said: ‘Our survey shows that current IT systems are not robust enough to keep up with fraudsters who use evolving technologies to continually by-pass controls.

‘As airlines seek to encourage more and more passengers to book online rather than via the phone or in person, they will need to ensure their websites meet data security standards.’

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