Fraud is a scary situation that is on the rise in our industry. Learn how one merchant got tricked into refunding a guest twice. Share a scary fraud story and you could be treated to a $50 Visa gift card.
PROPERTY MANAGER: Depends on valid payments from guests to pay homeowners, taxes, payroll, and other management expenses.
GUEST: Signs the rental agreement, provides credit card number, stays at rental property.
CARDHOLDER: Has been issued a credit card number by a card-issuing bank based on their individual credit history.
AT QUESTION: Is the Guest and the Cardholder the same person?
AT RISK: $2930.00
Back in February, a Property Manager (PM) Reservationist completed a guest reservation totaling $1465. A MasterCard number was given as payment. When the reservationist ran the sale it was approved, because there was indeed $1465 in available credit open on the card.
A few days later the Guest called back needing to cancel. He agreed to the $55 cancellation fee and stated that his original card number had been closed due to fraud found on the card. He provided his new credit card number for the Reservationist to credit, and she complied, running a $1410 refund to the new number.
Several months later, the Property Manager received a chargeback – a debit to their bank account – for the total amount of the original transaction. The Cardholder was claiming he did not have the same name as the Guest, had never made a reservation at the PM, and had never authorized such a charge to his credit card. He didn’t know anyone who had.
The Cardholder’s bank had seen this before – a card number was stolen and used fraudulently by the thief to make a reservation. The Cardholder received their money back in full, and all eyes turned to the PM to prove the Cardholder and Guest were one and the same. If the PM could prove it they could keep their money, the bank would have to force the Cardholder to pay, or absorb the loss themselves.
Alas, not only could the PM not provide proof that the Guest and the Cardholder were the same people, they realized they had refunded an additional $1410 back to the Fraudster’s “other card”, bringing their total loss to $2875.00, almost double what the original reservation was for.
See, I told you it was a scary story.
Do you have a scarier one? Think you have the scariest? Send it to us at email@example.com by 10/25 and let us be the judge! We’ll announce a winner on 10/30 and send you a Visa $50 gift card to use.