Fraud Detection & Protection Series: Red Flags Last-Minute Bookings
Finding the right balance between making the reservation and payment process easy and making it as secure against fraud as possible, is something that we encourage each property manager to find for your business. When you are contracting directly with the acquiring bank, as you do with Ascent, you have the security of knowing that your funds are backed by one of the biggest banks in the US, and therefore, we have access to resources that can help you determine what the right balance is for you. Successfully assisting you in identifying potential cases of credit card fraud will help protect your business.
One common “red flag” fraud indicator that we see in our industry is from last-minute bookings because fraudsters can book, stay, and leave before the chargeback comes through. Please be more discriminate and thorough with these last-minute bookings to protect yourself. You can always call for a Code 10 authorization if you are suspicious to gather more information and an authorization. You can also consider stating a preference for accepting different forms of payment (ones that can clear the bank before the stay and not be disputed after the transaction) if the booking is within 7 days of the stay. We suggest speaking to your bank about what options would work best for your business.
Fraud Example from an Actual Merchant
“A potential guest emailed us last minute to book 16 nights during high season at one of our properties. They provided their credit card number in the email, which was a red flag to start with. Then a few days later, emailed us that his family was in the hospital (wife in intensive care) due to a traffic accident.
Because of this accident he stated that his original credit card was lost and could we cancel their reservation and credit his other credit card?”
This merchant was right to trust their intuition that something was off with this transaction and to contact us. We recommend reaching out to the cardholder with additional questions any time you suspect something is not right. Your true guest will appreciate the extra security measures. Also, always issue refunds to the exact same card that was initially charged. Do not refund by cash or check or to a different card. Even if the card originally charged has been closed or compromised, the issuing bank can get the funds back to their cardholder. And having the refund go to the same card is the only way that you can reliably prove you’ve refunded the cardholder.
As with this case, fraudsters will sometimes charge to a stolen card, then claim to have an emergency that causes them to be unable to make it on their vacation, and ask that the refund go to a different card – one that is theirs (not stolen). If you go along with their request, when a fraud chargeback comes through on the stolen card, you are left holding the bag, because you can’t prove the refund.
In this case, when the authorization was called in, the card had not been reported stolen yet. The merchant DID refund the guest, but to the original card, which later was determined to have been stolen from Australia.
Additional Potentially Suspicious Transactions
- Customers who refuse to sign and return your rental agreement/confirmation letter
- Customers who want you to charge the card in excess of the total amount due, and to forward the excess funds to a third party
- Customers who provide multiple card numbers for the same stay
- Requests for services or merchandise you do not offer
- Customers who book with little or no regard for value or price
- Stories that don’t match
- Customers using someone else’s card
- Cards that have an incorrect starting digit by card type:
- American Express cards start with 3
- Visa cards start with 4
- MasterCard cards start with 5 and 2
- Discover cards start with 6
- Anything that triggers a negative gut feeling!
All of these tools, combined with security best practices, are your premier protection against fraud. Be proactive now, rather than reactive later, about fraud detection and fraud protection. Know your guests and trust your instincts. Contact Ascent with any questions you may have regarding fraud protection or additional ways to protect your business and your money at email@example.com.