How hotels can protect against fraud

A Tintswalo boutique lodge. The company says hotel credit card fraud can be averted.

A Tintswalo boutique lodge. The company says hotel credit card fraud can be averted.

Published Apr 2, 2013

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Johannesburg - Credit card fraud is becoming far more prevalent among guests who make hotel bookings in South Africa.

According to the South African Bank Risk Information Centre, more than R500 million was lost to credit card fraud in the first nine months of last year.

As swindlers develop more sophisticated methods, the hotel industry has started to feel the effects of credit card fraud. In particular, crooks are starting to take advantage of the fact that hotels are using the services of online booking engines.

Hotels that request either a 50 percent or full deposit when you make a booking are at risk of exposing themselves as an easy target for fraud, as fraudsters will claim to have paid for the booking via an online booking agent, using a credit card.

As the scam unfolds, fraudsters book in without producing a credit card and attempt to stay for the equivalent time calculated on the apparent deposit paid. The scam artists then check out from their stay sooner than the booked timeframe to escape being caught using a stolen credit card.

The hotel will only be able to establish that a stolen credit card was used for the booking, or that fraud has been committed, after the guests have checked out.

Tintswalo Property Group chief executive Lisa Goosen says these deceitful practices need not cripple a hotel’s business, as there are measures that can be taken that will safeguard the establishment against this type of fraud.

If the deposit policy requests payment of between 50 and 100 percent, fraudulent practice can be avoided by compelling guests to produce the credit card used to make the reservation when the guests check in.

Hotels should insist that a copy of the credit card with ccv number or authorised amount is held, even if the guest insists that everything has already been paid for.

The process of filtering out fraudsters can often be cumbersome for legitimate guests but the hospitality sector also has a responsibility to protect its own best interests through policies and procedures that ensure growth and ultimately contribute to further improvement of the sector.

Goosen – whose company, Tintswalo, owns four boutique lodges – says it must be recognised that the process for online bookings should only involve the reservation being confirmed via credit card payment. It is also critical that copies of either an ID or a passport are taken on check-in.

If two guests are staying in one room, ideally copies should be taken from both guests.

Ultimately, by taking these small steps and cross-checking that all information provided is 100 percent correct and corresponds across booking platforms, hoteliers can ensure that credit card fraud does not affect their business, and allow their establishment to function optimally and obtain long-term success. - Saturday Star

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