FRAUD on lodge cards
is on the rise. Agents
report multiple,
unexplainable, dodgy
transactions on lodge cards
after booking tickets for
LCCs online.
Bronwyn Pienaar, owner
of Travessentials in Cape
Town, recently experienced
an instance of fraud after
booking a flight on Mango
for her clients.
Bronwyn says she only
used the lodge card to book
flights online on Mango for
her clients. Shortly after
booking flights, Bronwyn
received a notification that
the lodge card had been
used for a transaction of
R435,11 at 04h00 on a
Saturday.
When Bronwyn reported
the matter to Mango,
she was referred to the
airline’s fraud team. When
she asked them for more
information about the
transaction, they told her
they “wouldn’t be able to
divulge this confidential
information”. Only the police
would be able to obtain the
information and only if they
were in possession of a
subpoena.
“These kinds of incidents
reflect badly on travel agents
in the eyes of their clients,”
says Bronwyn, who now
refuses to use clients’ lodge
cards when booking on the
Mango agent portal. “I don’t
want to take the chance and
would rather use my own
credit card.”
Bronwyn says LCCs risk
losing travel agent business
if the agent portals are open
to fraud. “At least on the
GDS, we’re assured that no
fraudulent transactions will
take place,” she says.
Mango told TNW: “Mango
views this as a very serious
allegation. The company is
not aware of any fraudulent
usage of lodge cards by
Mango staff.”
But, Bronwyn isn’t the
only travel agent to have
exexperienced fraud. “We
have seen fraud, not just on
Mango but on other LCCs,”
says Rachael Penaluna,
business manager of Sure
Maritime Travel.
Lodge cards appear to
be more vulnerable to
fraudulent transactions than
credit cards. FlySafair vp
of Sales and Distribution,
Kirby Gordon, says although
FlySafair isn’t aware of any
fraud on lodge cards, there
are a few layers of fraud
detection on credit card
payments, which aren’t
always present on lodge
card payments.
“The airline’s system
will use its metrics or
algorithms to determine if
a credit card transaction is
likely to be fraudulent,” he
says. This algorithm usually
gets relaxed for a lodge
card, because the system
has been programmed to
identify the card as a known
card and that multiple
daily transactions must be
expected, Kirby says.
The second layer of
protection is the bank. He
says: “Banks will look at
transactions using their
algorithms which have a
little more insight into the
card holder – insight that
merchants wouldn’t see.
With a lodge card these
checks would remain.”
The final layer of protection
is the user or card holder
layer. Says Kirby: “This
involves manual checks on
the account and checks
on bank and 3D secure
notifications, or the required
use of a one time password.
The latter is often disabled
in a lodge card situation.”
Christo Snyman, national
director: Forensic Services
of Mazars,says that it’s
difficult to point fingers when
it comes to fraud and lodge
cards can be compromised
at any time. “The
responsibility lies with the
card-issuing bank to locate
the point of compromise and
deal with it,” he says.
American Express told
TNW that it was aware
Card Not Present fraud
is increasing and that it
was working with
e-commerce merchants to
implement stricter security
protocols.
