With Card-Not-Present Fraud on the Increase, We Have A Solution With AscentPay!
Last month, CNP (CardNotPresent) Expo attendees in San Francisco got an early look at one of the most anticipated annual fraud benchmarking reports. For U.S. merchants in 2019, the True Cost of Fraud Study from LexisNexis Risk Solutions found that for every $1 of fraud loss, the actual cost to companies is $3.13.
That’s 6.5% higher than last year and the highest figure measured by LexisNexis in the 10 years the company has been producing the report.
There are various costs that come into play when you lose to fraud. A recent study by Javelin Strategy & Research revealed 60% of merchants’ chargeback-related costs arise from chargeback management expenditures, rather than liability.
According to Kim Sutherland, Vice President of Fraud and Identity Strategy at LexisNexis Risk Solutions, to account for all the costs a business incurs from a fraudulent transaction the company uses a proprietary multiplier which includes the time spent on researching the fraud, restocking or restoring services, and other various costs that come into play when you lose to fraud, in addition to the direct loss of the stolen goods/services.
The CNP Fraud study also noted a huge surge in fraud attempts and successful attacks. After posting moderate annual growth since 2013, the number of overall fraud attempts rose by 123% from 2018 to 2019. And, the number of those attempts that succeed grew by 84%. Finding a balance between risk and customer experience is key with fraud on the rise.
Recent news about increase of fraud in the travel industry may not come as too much of a surprise, given the high-profile attacks on major hotel chains and airlines affecting millions of customers. Travel industry fraud is getting worse, with a recent PhocusWright Hotels Outlook report 2018 to 2022 which says hospitality has the second-largest number of cybersecurity breaches after the retail sector.
These numbers show that fraud is hitting all areas of the travel industry, and in many different forms. The high volume of transactions, large value transactions, rapid pace of transactions, large number of suppliers, and the global nature of travel purchasing all lead to the prevalence of fraud in the industry. The sensitive nature of data can also attract fraudsters, who can use that data for deceitful purposes.
What Can Property Managers Do To Help Prevent Fraud?
- Stay current on the types of attacks happening in the industry, down to a product level.
The short-term stay industry may see different types of fraud than the cruise or airline industry. This is why our mission is to keep you educated on the fraud trends in our vacation rental and corporate housing industry. We can provide you more targeted guidance for our industry than you local bank, who does not focus specifically on the ever-changing lodging industry.
- Find the right balance of enhancing your customers’ online experience and protecting their data.
In the constant battle for online guests, the user experience has been emphasized, resulting in the seamless online transactions that guests love. In some cases, this can come at the expense of implementing identity verification measures, which can be seen to potentially contribute to abandoned purchases.
However, successful Property Managers will need to find the right mix of intelligent fraud detection in order to prevent fraud while giving customers a friction-less experience. Utilize the AVS (address verification service) and any other tools you have to follow your gut feelings about a questionable transaction.
- Know your guests.
Forming solid relationships with your guests can help your company better prevent and detect fraud. Ensure the name on the card matches the name on the rental agreement. Call the guest with any questions you may have – true guests will appreciate your thoroughness and increase your return guest base.
- Protect your guests’ data at all costs.
Be sure that you have a secured site and are PCI Certified. We can help you ensure you are PCI Certified. Contact us at firstname.lastname@example.org for more details.
- Offer your guests a payment alternative removing liability for chargeback and fraud like AscentPay powered by Uplift.
We recently revealed a new consumer travel finance product called AscentPay powered by Uplift that helps guests pay for their vacation rentals over time. Guests get the instant gratification of booking a trip now and paying it off later, while Property Managers get paid in full at the time of booking without the liability for chargebacks or fraud. The vacation loan, issued instantly at the time of booking, provides indemnification from these risks for both the property manager and the homeowner by issuing the Property Manager a secure virtual credit card number (VCN) after the guest agrees to the terms of the loan.
VCNs are used for one transaction only and controls can be set to limit how the number is used. When you protect your guests’ data, you protect your own reputation. Fraud is not going away, and fraudsters will continue to change their tactics and get more sophisticated as technology does. In the fight against fraud, knowledge is power. The bottom line is that Property Managers must find a way to protect their most important assets – their database and reputation. We can help you do that and increase revenue and direct bookings with AscentPay.