Credit card fraud and hotels - Perspectives

22 August 2022

Hotels are seen as a soft target by fraudsters. With inexperienced staff or people returning from prolonged periods of absence there’s more of a chance they will slip up. Couple that with an eagerness to recoup losses from the covid years and you’ve got an increased risk of becoming a victim of credit card fraud.

Knowing how fraudsters might attempt to steal your money is half the battle in combatting credit card fraud. so, here is a timely reminder, from our Senior Regional Fraud Manager Brian Kinsella, of the kinds of scenarios you might face.

Posing as a rich individual booking for a friend or as a fake travel agent, the fraudsters use compromised credit card numbers to make bookings at attractive hotels and pay for them in advance. These bookings are sold on to unsuspecting travellers who pay directly to the fraudsters.

It results in a financial loss to your business when the genuine cardholder raises a chargeback, and a potential loss in reputation when the unwitting travellers arrive at your hotel.

To avoid becoming a victim of this kind of fraud, make sure your guests present the card they paid with and if they can’t, refund the original reservation and ask for payment by a different means. Consider only accepting pre-paid reservations via an eCommerce account with Strong Customer Authentication (SCA), such as EMV 3DS, for added protection. Transactions made through known booking platforms may be excluded to avoid friction in the purchasing process.

Read more top tips on avoiding card fraud
This is when organised criminals make large bookings on a credit card which is followed up by a cancellation and refund request but to a different account. When the genuine owner of the card raises a chargeback it will be indefensible and the hotel faces a double financial loss.

Watch out for people who offer you new credit card numbers when one is declined, particularly if they come with consecutive numbers. They are also unlikely to question the high cost of a booking and use free email accounts or one that do not match up with their name, eg a John Doe using an email address like bloom7986@xxxx.xxx.

Remember, always refund cancellations to the same account used to make the booking.
In this scenario, items not normally sold by a hotel are ordered when making a booking for a fake conference, business meeting or private event like a wedding. Items might include bottles of whisky, high-value souvenirs or tablet computers. Having paid for the goods using compromised credit card numbers, the criminals arrange for delivery of the items or a freight company to collect from the hotel.

Stick to offering typical hotel services when taking credit card payments, especially from first-time guests.
Here the scammers attempt to make fraudulent refunds on unguarded terminals in the hotel when it is quiet. To avoid becoming a victim of this type of scam, keep terminals locked away, regularly update refund passwords and ensure staff are aware of the need to be vigilant of being distracted. Read more on tips to avoid becoming a victim of fraud in our top ten things to be aware of.

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Most common types of credit card fraud in the hotel industry

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