How travel agents can help minimize the risk of fraudulent bookings 

Sometimes we're too eager to make a sale and miss some common signs that something just isn't right. As more and more people start to travel, it's important to notice the signs of fraud and how to minimize the risk of fraudulent bookings. It's also important to know the best way to fight a chargeback is to prevent them. 

What is a chargeback?

A chargeback is a transaction reversal initiated by a credit card holder. It's offered to cardholders by a cardholder's bank or financial institution as a financial form of protection against fraudulent charges. They happen for a few different reasons:

  1. True Fraud: The card has been lost or stolen and unauthorized use has resulted in compromised payment information.  
  2. Friendly Fraud: This is a dispute by the cardholder when they perceive the charge as a billing error or don't agree with the conditions of sale. Usually the case where a family member uses the card without permission, the cardholder forgets what the charge was for or for how much, misunderstanding or disagreement with terms and conditions or cancellation policy, etc. 
  3. Chargeback Fraud: A chargeback used as a form of theft to keep products or services and receive a refund via dispute with the bank. Common in the travel industry, and usually happens when a client doesn't understand the cancellation policy -or- is not eligible for a refund so they decide to chargeback the cost of their trip. 
It's important to note that the chargeback process is skewed in favor of the cardholder, so it is always important for the agent to receive a CCAuth Form from the cardholder. 


True Fraud: Common red flags that a booking is fraudulent

  1. Last minute travel: The client wants to travel immediately (within a few days of booking) and doesn't seem to care about price or duration of travel. This is especially common with air-only reservations and first-time customers. Some vendors offer last minute deals, but if you have a new client you just met that wants to book on a whim, this is a cause for caution. Most new clients have a lot of questions, and take some time to get to know you and decide on their trip details. New clients also don't generally book air-only reservations through a travel agent because they can easily do this themselves online. A good tip is to reserve last minute deals for long-time clients you are familiar with, and to never book air-only reservations. 
  2. Suspicious address, email address, phone number, or credit card information: Take a moment and conduct some research on the client before booking any travel. An easy step is to google the client's address, email address, and phone number online to see if they seem legitimate. Red flags would be VOIP phone numbers, invalid addresses, or .edu and .org emails for fake institutions or have strange numbers or characters in them (Example: ChristinaD@Gobigbluehorseuniversity2.edu or ShaunAnders@Amazonhelp.art). Many email apps don’t show you the full sender’s email address by default anymore, click to reveal the full email address (some email programs have a little arrow by the name that reveals the full address) and you’ll normally get the first clue something’s not right. Also be cautious with foreign credit cards.  
  3. The traveler name does not match the name on the credit card: You always need to get a copy of the government issued ID -AND- a signed and initialed credit card authorization form from the person whose name is on the credit card. If the client knows the cardholder, why isn't the cardholder signing for this transaction? 
  4. Multiple credit card numbers provided: If the first card is declined and another card is provided, this might be an indication of fraud. Take note if this client keeps providing a new credit card number till one "works." We all run into card issues every now and then, but most travelers have prepared to pay for their trip and declining card numbers should clue you in that something may not be right.
  5. The departure city isn’t near the cardholder's billing address -or- in their itinerary: Unless you're also booking transfers, how is the client getting home? It may be the case the address they gave you isn't actually theirs. Ask the client why they aren't leaving from their home or returning to it. It's also a good idea to lookup the client's IP address to make sure their IP location matches the location of the address they gave you. If it doesn't they might be using VPN or proxy (red flag).

What is a BIN search?
A Bank Identification Number or BIN (sometimes also known as an issuer identification number) refers to the first 4-6 numbers on a payment card like a debit card or credit card. A BIN search isn’t enough on its own to know if the transaction is fraudulent or not, but can be used in combination with other methods or tools to determine if a transaction is suspicious. 

A BIN search is a process to match if the information given to you by the client matches what the bank has for the card. These can be done online through sites like quickbinlookup.com, BinBase.com, BinList.net, as well as paid fraud prevention services. A BIN search can tell you:

  • Card brand (Visa, Mastercard, etc)
  • Card type (debit, credit, etc)
    Issuing bank country
  • Bank name
  • Card level (Gold, platinum, etc)) 
  • Bank website and phone number

Things you can look for in a BIN search:

  • Does the issuing bank country match the shipping address? If not, this is a red flag. 
  • Does the card type match what the customer gave? If they tell you it's a Visa but the BIN search shows it's a Mastercard, that's a red flag. 
  • Is the card prepaid? 

A BIN search is a great additional tool to help reduce fraud, but it’s only good in combination with other tools and research methods like searching Facebook, whitepages.com, google, IP address search, etc.

Remember that these red flags are only causes for caution. It means you should do a little more research into the client just to be sure they seem legitimate. A quick google or Facebook search may clear up the situation. It may also clue you into a problem. If you decide to make the booking for the client, be sure you receive a physically signed Credit Card Authorization Form and a copy of the card holder's government issued ID before processing a payment. 

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When in doubt, it's better to politely decline the client's request and refuse to service the booking.


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How to prevent chargebacks:

1. Provide excellent customer service and support.
2. Be available and easy to reach.
3. Be clear and concise when explaining the booking terms and conditions and cancellation policy. 
4. Always get a signed Credit Card Authorization Form for every booking, and make sure the card holder's ID matches the full name on the card used to pay for the transaction.

How do I fight a chargeback? 

The agent must provide proof that the cardholder was involved in the booking, authorized the credit card transaction, was provided the terms and conditions of the booking, and either refused or accepted trip protection/travel insurance. You will need to provide:

  1. A copy of the card holder's government issued ID to prove the identity of the cardholder was validated.
  2. A signed credit card authorization form from the cardholder to prove the cardholder authorized the transaction.
  3. An initialed credit card authorization form that clearly shows the terms and conditions of the booking were accepted by the cardholder, and that the trip protection/insurance was accepted or declined. 
The good news is, this is all on one form that Xstream has provided to you! The Credit Card Authorization Form you can use for your bookings is located on your Xstream Agent Hub under Forms & Documents from the Resource Center. Be sure to also get a copy of the cardholder's government issued ID. 

Although nothing can prevent chargebacks 100% of the time, the credit card authorization form is an important resource we've provided to help protect you and your business. 

Can I use the vendor's credit card authorization form?

Yes, as long as the form also has a place for the client to confirm they understand the booking terms and conditions AND allows them to accept or refuse trip protection/travel insurance. Some vendors may even require you to get their own credit card authorization form signed. There are also other credit card authorization form templates online that you can use.

If you decide to use another credit card authorization form, just make sure you are getting in writing that the cardholder authorizes the charge to their credit card, has reviewed the booking's terms and conditions, and has either accepted or refused trip protection/insurance. Also get a copy of their government issued ID to verify the client's identity. 

What if my client's refund is taking too long to receive from the vendor? 
Contact the vendor and work with them to help your client receive a refund. Even if the refund process is taking a bit longer than the client anticipated, never encourage your client to chargeback for a refund. The chargeback process can take over 6 months depending on the vendor or bank, and you will be held liable to payback the funds either to the vendor or Xstream Travel.