EXCHANGE FRAUD - QUESTIONS Are all tickets eligible to be exchanged? How long can an original ticket live? After 12 months, can a ticket be exchanged? After the original date of departure, can the ticket be exchanged? Can an agent change of form of payment? From cash to credit or credit to cash? Can an agent change the passengers name? How long does it take a carrier to identify or research multiple exchange transactions before issuing a debit memo?
EXCHANGE FRAUD Life of one ticket – Almost 3 years Original ticket was issued February 2006 reissued 24 times Included splitting into 9 MCOs for residual value and 15 additional new tickets Included FOP changes Included Passenger name changes Final ticket was issued in December 2008 Different passenger Different itinerary Different FOP
EXCHANGE FRAUD – CARRIER SOLUTIONS Carrier solutions Identify exchanges – 24 of them? Review (find) original ticket If exchanged more than once, use DRS by inputting one ticket at a time Send debit memos? If the original ticket is from 2005, do you DM for full value of the new ticket? Or initial ticket? Or just a penalty? Do you want to know if the original ticket was issued over one year old?
WHERE IS THAT ANALYTICAL EXCHANGE SOLUTION? Do you want to see that solution? Do you want to see your carriers specific data? Do you want to see ARCs analysis of that data? Too early for an answer – just wait!
REFUND FRAUD Are all tickets eligible to be refunded? Can a ticket be refunded after 1 year? Can the ticket be refunded after the departure date? Can a ticket issued in 2006 be refunded in 2009 after having been exchanged 9 times? Flown and refunded – how does that happen? How long does it take a carrier to identify or research an eligible refund?
REFUND FRAUD – NEW CASES Skokie Illinois agent – May 2009 E-tickets issued and flown Pattern of refunding flown tickets through IAR Agent pays debit memos after carrier discovers flown/refunded Audit confirms no plausible explanation for flown/refunded tickets Agent placed in Section XV of the ARA ARA terminated - $77K
REFUND FRAUD ARC ANALYTICAL SOLUTION Identify all refunds – Manual and GDS Analyze each refund and develop weekly report to carrier identifying all anomalies Research individual refunds Identify agents patterns of refunds Compare settled data vs. refund data Identify previous exchanges used to change form of payment from credit card to cash prior to refund Review length of time between Date of Issue, Date of Departure and Date of Refund
COMMISSION FRAUD - DISCLAIMER ARC and the carriers can not and will not discuss commissions I am not here discussing or asking questions about individual carrier-authorized commissions I am here to show you how 100% is (sometimes) fraud
COMMISSION FRAUD Is 100% commission ok on every ticket? Is 100% commission ok on every MCO? Is flight OK on a ticket with 100% How long does it take for a carrier to identify or review flown tickets with 100% commissions?
COMMISSION FRAUD – NEW CASES Port Orange, Florida agent – February 2008 Issued tickets and took 100% commission Refunded the tickets to owners personal credit card Audit confirms no plausible explanation for 100% commission Agent placed in Section XV of the ARA ARA terminated - $59K
COMMISSION FRAUD – NEW CASES Chicago Illinois agent – May 2009 Issued 305 MCOs and took 100% commission - $500K Issued with owners and business partners credit cards, as well as PAXs credit cards Refunded the MCOs and returned the 100% commission on 230 MCOs - $400K Audit confirmed - Pay-day loans – borrowed the money from carriers and would return the money, on average, 36 days later 123 open 100% commission-MCOs, which were not refunded - $164K Agent placed in Section XV of the ARA ARA terminated - $164K
COMMISSION FRAUD ARC ANALYTICAL SOLUTION Identify all tickets/MCOs 100% commission Analyze each MCO/ticket with a 100% commission and develop weekly report to carrier identifying all anomalies Research individual MCOs/Tickets Identify agents patterns commissions Using carriers advice re commissions, apply rules to identify non-authorized commissions
VOIDING FRAUD - QUESTIONS Is an E-ticket void OK with an ESAC code? Is a paper ticket void always OK if it voided in the GDS? Are Manual voids done in IAR OK? How long does it take a carrier to determine if a voided ticket was properly voided to prevent usage?
VOIDING FRAUD – NEW CASES Chicago Illinois agent – March 2009 October – March, 64% of all tickets voided Paper tickets – flown Audit assigned, agency location not operational Another address located - found another agency name and possible unauthorized owners name Agent placed in Section XV of the ARA ARA terminated - $111K in voided/flown tickets
VOIDING FRAUD ARC ANALYTICAL SOLUTION Identify all Voids – Manual and GDS Analyze each void and develop weekly report to carrier identifying all anomalies Research individual voids Identify agents patterns of voids Compare settled data vs. voided data
PLEASE, NO MORE ANALYTICAL SOLUTIONS! Why am I highlighting Analytical Solutions? No prizes for answering this question! One example: Carriers do purchase various reports from ARC including refunds, voids, commissions (Only RM has the new exchange report) In order to identify problems, carriers have to train staff to use the reports to identify and research areas that might pose problems Staff have little time to use the reports
PLEASE PROVIDE ANALYTICAL SOLUTIONS FOR US! Recent Case One carrier purchased the ARC void report Staff either 1) didnt know how to use the report or 2) wasnt trained to identify and research such problems or 3) didnt have time to use it or 4) all of the above Weeks later, the carrier was the biggest looser in the Chicago agents voiding scheme Had they used the report the first week, they would have saved thousands of dollars
WHERE IS THAT ANALYTICAL EXCHANGE SOLUTION? Why wouldnt I tell you? Its your hands! Prizes you received for answering questions is a prototype of the report – using your data! Want to learn more about what it means? Times are available this afternoon and throughout the seminar for ARC to demonstrate our analysis.
WHY CAN ARC MAKE A DIFFERENCE? COMPASS 39+ months of data ARC can see yesterdays tickets to identify anomalies today identifies patterns that individual carriers cannot see Experienced ARC Analysts Immediate contact with ticketing agent
YOU DIDNT GET A PRIZE?? You want your data but didnt answer any of the questions? Check with Rafat or Debbie to see if we have your data available.
Where do we go from here? Always ask for help: Individual carrier problems are rare Find a problem? Suspect a problem? Contact ARC 703 816 8126 Risk Analysis 703 816 8137 Field Investigation & Fraud Prevention