System and method using enhanced authorization data to reduce travel-related transaction fraud

• US 8,386,376 B2
• Filed: 02/09/2005
• Issued: 02/26/2013
• Est. Priority Date: 02/09/2004
• Status: Expired due to Fees

• Current Assignee: Liberty Peak Ventures, LLC (Dominion Harbor Enterprises, LLC)
• Original Assignee: American Express Travel Related Services Company, Inc. (American Express Company)
• Inventors: Gomes, Kristin Hoyne, Webb, Ian, Mohanty, Sabyasachi, Marshall, Vernon, Goulden, Stuart
• Primary Examiner(s): Kyle, Charles
• Assistant Examiner(s): Chencinski, Siegfried E
• Application Number:
  US10/588,811
• Publication Number:
  US 20070282674A1
• Time in Patent Office: 2,939 Days
• Field of Search: 705/1, 705/35, 705/5, 705/6, 705/8, 705/14, 705 37- 39
• US Class Current: 705/38
• CPC Class Codes: G06Q 10/02 Reservations, e.g. for tickets, services or events
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions

Abstract

Processes for reducing fraud risk in credit transactions, particularly those involving airline ticket purchases, include collecting the following additional transaction variables and their use in real-time authorization decisions: credit card holder name, reservation code, passenger name, origin city, destination city, travel date, routing description, class of service, e-ticket indicator, number of passengers traveling and carrier code. The additional transaction variables received during a transaction involving the purchase of airline tickets are passed, in addition to the transaction variables traditionally included in a real-time authorizations request, to a fraud risk evaluation model maintained by a financial institution or other entity responsible for authorizing a payment for the transaction. The fraud-risk models use historical behavior and optimal risk decision-making factors to authorize or reject the transaction in real time, without slowing standard authorization processing times.

Claims

1. A method comprising:

receiving, by an automated programmed electronic computer system for authorizing a transaction between a merchant and an account holder of a financial account, transaction variables for the transaction involving a purchase of a travel ticket using the financial account,;

receiving, by the computer system, concurrently with the transaction variables, additional variables including a passenger name on the travel ticket, a travel date, a routing description of the travel ticket, and an electronic ticket indicator, wherein the additional variables are received as part of a real-time authorization process;

processing, by the computer system, the passenger name on the travel ticket, a travel date, a routing description of the travel ticket, an electronic ticket indicator and transaction variables through a fraud risk model to determine a probability of fraud for the transaction; and

transmitting, by the computer system, an approval of the transaction or referral of the transaction for further identification based upon the output of the fraud risk model.

2. The method of claim 1, further comprising:

approving the transaction in response to the risk factor being within a range of acceptable values.

3. The method of claim 2, the approving further comprising:

retrieving a purchasing history of the account holder; and

approving the transaction based on the output of the fraud risk model and the purchasing history.

4. The method of claim 2, the approving further comprising:

retrieving a status of the financial account; and

approving the transaction based on the output of the fraud risk model and the status.

5. The method of claim 1, further comprising:

declining the transaction when the risk factor is within a range of unacceptable values.

6. The method of claim 1, further comprising:

transmitting a request to contact a financial institution maintaining the financial account in response to the risk factor being within a range of unacceptable values.

7. The method of claim 1, further comprising:

retrieving a purchasing history of the account holder; and

declining the transaction based on the purchasing history.

8. The method of claim 1, further comprising:

retrieving a status of the financial account; and

declining the transaction based on the status.

9. The method of claim 1, the fraud-risk model comprising a combination of risk values assigned to the transaction variables, the risk values determined from historical data of prior transactions involving a plurality of account holders.

10. The method of claim 1, the fraud-risk model comprising a combination of risk values determined for various comparisons of the transaction variables, the risk values determined from historical data of prior transactions involving a plurality of account holders.

11. The method of claim 10, wherein a risk value of a comparison of a name of the account holder and the passenger name indicates a higher risk when the name of the account holder does not match the passenger name, and indicates a lower risk when the name of the account holder matches the passenger name.

12. The method of claim 1, wherein the transaction variables are received in a standard format so that a processing time of the transaction is not greater than a standard processing time for transactions that do not involve the purchase of travel tickets.

13. The method of claim 1, the financial account comprising at least one of:

a credit card account, a charge card account and a debit account.

14. The method of claim 1, the transaction variables further comprising:

an origin city for the travel ticket, a destination city, a class of service of the travel ticket, and a number of passengers traveling.

15. The method of claim 1, the transaction variables comprising:

a name of the account holder, a reservation code of the ticket, and a carrier code.

16. A method for authorizing a transaction between a merchant and an account holder having a financial account, the transaction involving a purchase of an airline ticket, the method comprising:

transmitting, by an automated programmed electronic computer system for authorizing the transaction to a transaction processor, transaction variables for the transaction;

transmitting by the computer system, concurrently with the transaction variables, additional variables including passenger name on the airline ticket, a travel date, a routing type of the airline ticket, and an electronic ticket indicator, wherein the passenger name on the travel ticket, a travel date, a routing description of the travel ticket;

an electronic ticket indicator and transaction variables are processed through a fraud risk model by the transaction processor to determine a probability of fraud for the transaction, wherein the additional variables are transmitted as part of a real-time authorization process; and

receiving, by the computer system and from the transaction processor, an approval of the transaction or referral of the transaction for further identification based upon the output of the fraud risk model.

17. The method of claim 16, wherein the transaction variables are processed by the transaction processor through a fraud-risk model comprising a combination of risk values assigned to the transaction variables, the risk values determined from historical data of prior transactions involving a plurality of account holders.

18. The method of claim 16, wherein the transaction variables are processed by the transaction processor through a fraud-risk model comprising a combination of risk values determined for various comparisons of the transaction variables, the risk values determined from historical data of prior transactions involving a plurality of account holders.

19. The method of claim 18, wherein a risk value of a comparison of the name of the account holder and the passenger name indicates a higher risk when a name of the account holder does not match the passenger name, and indicates a lower risk when the name of the account holder matches the passenger name.

20. The method of claim 16, wherein the transaction variables are transmitted in a standard format so that a processing time of the transaction is not greater than a standard processing time for transactions that do not involve the purchase of airline tickets.

21. The method of claim 16, wherein the merchant comprises at least one of:

an online travel vendor, an airline carrier and a travel agent.

22. The method of claim 16, the transaction variables further comprising:

an origin city for the travel ticket, a destination city, a class of service of the travel ticket, and a number of passengers traveling.

23. The method of claim 16, the transaction variables comprising:

a name of the account holder, a reservation code of the ticket, and a carrier code.

24. A method comprising:

determining, by an automated programmed electronic computer system for generating and applying a fraud-risk model to financial transactions involving purchases of airline tickets by account holders from merchants and based on historical data, a risk value for transaction variables and additional variables, the additional variables including at least one of;

an account holder name, a reservation code, a passenger name, an origin city, a destination city, a travel date, a routing description, a class of service, an electronic ticket indicator, a number of passengers traveling and a carrier code;

combining, by the computer system, the risk values to generate a fraud risk model that determines risk factors for transactions involving purchases of airline ticket;

receiving, by the computer system, a request from a merchant to authorize a transaction involving a purchase of a ticket by an account holder, the request including transaction variables and additional variables corresponding to the account holder and the ticket, wherein the additional variables are received as part of a real-time authorization process;

determining, by the computer system, a risk factor for the transaction by inputting the an account holder name, a reservation code, a passenger name, an origin city, a destination city, a travel date, a routing description, a class of service, an electronic ticket indicator, a number of passengers traveling and a carrier code corresponding to the account holder and the ticket to the fraud risk model; and

generating, by the computer system, an approval of the transaction or referral of the transaction for further identification based upon the output of the fraud risk model.

25. A method comprising:

receiving, by a computer system for authorizing a financial transaction between a merchant and an account holder, transaction variables for a transaction;

receiving, by the computer system, concurrently transaction variables, additional variables including a passenger name on the travel ticket, a travel date, a routing description of the travel ticket, and an electronic ticket indicator, wherein the additional variables are received as part of a real-time authorization process;

processing, by the computer system, the passenger name on the travel ticket, a travel date, a routing description of the travel ticket, an electronic ticket indicator and transaction variables through a fraud risk model to determine a probability of fraud for the transaction; and

transmitting, by the computer system, an approval of the transaction or referral of the transaction for further identification based upon the output of the fraud risk model.