ARE YOU RUNNING A HOTEL BUSINESS, BUT THE SALES FIGURES ARE NOTE MAKING SENSE?

(1d) Fraud and Abuse Schemes Committed by Guests

Three common frauds committed by guests are payment card fraud, currency counterfeits, friendly charge back fraud and asset concealment of the hotel beddings, tea kettle, serving trays, bathroom towels and other removable portable assets. Presented below are the high-level overview of the common fraud schemes committed by hotel guests.

• Payment Fraud Scheme occurs in two ways. Payment with valid stolen card and payment with counterfeit/fake card. Counterfeit payment cards are forged cards or cloned with stolen valid customer bank account details. Guests make payments of the hotel services with valid credit card stolen or counterfeit/fake credit cards without the knowledge of the hotel staff.
• If the stolen payment card had been previously reported to the bank by the valid card owner and the card has been blocked, the guest payment will fail.
• Where the stolen card has not been previously reported to the bank, the guest payment may pass, but may likely be reversed by the bank once the valid card owner reports and presents valid evidence for the complaint.
• The payment with the counterfeit or fake payment card may also pass but will certainly be reversed once the valid bank customer account owner whose card has been cloned complains and presents valid evidence. Fraudulent card schemes happen more with swipe payment cards than in chip and pin cards. Fortunately, the banks would want the hotels to provide evidence of the guest transactions within a stipulated time frame and investigation is done before any refund or reversal is made. This means that it is important for hotel management to maintain audit trail of all transactions with all customers.
• Friendly charge back fraud scheme happens when a guest has paid for services enjoyed but requests for refund or charge back.
• Asset concealment happens when guests steal the physical assets of the hotel such as beddings, tea kettle, serving trays, bathroom towels and other removable or portable assets.
• Counterfeit currency happens when a guest makes payment with counterfeit currency and is accepted by the hotel staff without the knowing.

(1e) Cyber Security Fraud Schemes or Unethical Hacking Scheme

Cyber security fraud scheme involves gaining unauthorized or forceful access to the hotel computer system for personal gains which include

• Hacking for Identity Theft happens when an unethical hacker (often outsider) gains unauthorized access to the hotel computer database with or without the help of the hotel staff to steal sensitive information about the hotel or customers, vendors, staff or others in order to sell them for fraudulent purposes or use the information to commit fraud.
• Hacking for Ransom happens when an unethical hacker gains unauthorized access into the hotel computer system and prevents the computer from functioning until a certain amount of payment is made to the hacker as ransom.
• blocking the computer system from working. by injecting large streams of data to fill the computer memory and cause breakdown
• Hacking for show of power supremacy happens when an unethical hacker gains unauthorized access to the hotel computer or website and replaces the hotel records with jabs for show of power.
• Hacking for customer loyalty theft happens when a hacker gains unauthorized access into the hotel customer database to steal loyal customer loyalty points and use to book for room reservations with the hotel or buy gift items. 
• Company WIFI /Internet Access Hacking happens when the hotel Wi-Fi or internet data access is shared and used in the neighborhood to run personal or commercial services or cyber cafe with or without the knowledge of the hotel employee. This does not have direct impact on sales but certainly contribute to increasing the cost of running the business and will hit the profit margin.