Scam Alert

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The American Hotel & Lodging Association (AHLA) recently launched an awareness campaign entitled “Search Smarter”  aimed at helping travelers avoid lost reservations, additional fees, and ruined vacations.

Americans make 500 online hotel bookings every 60 seconds, but evidence from new, extensive polling data from the American Hotel & Lodging Association (AHLA) suggests they’re not getting the deal they think they are. The two culprits are (1) online booking scams and (2) misleading marketing messages perpetrated by online travel agencies and their third-party affiliates.

Additional research reveals that online scams made through fraudulent sites are on the rise, resulting in 55 million “bad” bookings of this type each year, costing consumers $3.9 billion.  In 2015, just 6% of travelers reported booking on what they believed was a hotel’s official website, only to find they had booked on a fraudulent site not affiliated with the hotel. Just two years later, the number of travelers who have experienced this has nearly quadrupled to 22%. • Seniors in particular have major concerns about the lack of transparency in online booking – many of which are due to bad experiences. 1 in 10 consumers 65 or older say they have accidentally booked with a fake site when intending to book directly with a hotel.

AHLA Position

Transparency, consumer choice, and guest satisfaction are at the core of the hotel industry’s business model. AHLA is raising awareness among consumers, Congress, and federal agencies to make sure guests have all the necessary information prior to booking their hotel reservations. With so many ways to book a reservation, it’s important to make sure consumers understand how to slow down, search smarter and make the best decisions throughout the booking process for themselves and their families. Consumers should know what to look for before they book a hotel reservation.

Visit https://ahla.com/SearchSmarter to learn more about the “Search Smarter” campaign.

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From the Racine Journal Times

A Racine man faces a possible fine of $250,000 for failing to make good on a promise to local businesses that he would advertise them in tourism maps.

According to a press release issued today by Wisconsin Attorney General J.B. Van Hollen’s office, the state sued Edward Zapencki at the request of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP), which investigated Zapencki based on a large number of complaints.

The complaints allege that, using the name Fun Treasure Maps, Zapencki solicited small business owners as far back as 2007 to advertise on cartoon-style maps prepared for targeted Wisconsin communities. Hundreds of businesses paid for advertising on Fun Treasure Maps that have never been produced, the release states.

Read more from the Racine Journal Times here.

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WH&LA has been advised about a new credit card scam with a slightly different twist from other recurring scams. Properties are encouraged to review their policies regarding credit card pre-payments, cancellations and refunds, and to beware of the potential for fraudulent activity. A summary of the most current scam can be found here.

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WH&LA received the following Crime Alert that is being distributed by the City of Brookfield Police Department:

“Crime Alert! Please check your past, present and future reservations for a guest using a Visa card number ending in 4648, explaining that he lost the card and Visa will be faxing over authorization. Shortly thereafter a fax arrives from Visa authorizing the card. Visa has confirmed that the card is a pre-paid Visa card and has no charging authority.”

To access the name the guest is going by, click the Advisory link below. If  you have any information on this individual, contact Officer Hart of the City of Brookfield Police Department at 262/787-3702.

Additionally, WH&LA shared information regarding a scam involving shady pizza delivery operations targeting hotels, as well as a notification from the manufacturers of fluorescent lights of a 25% increase in prices for tube lamps and compact fluorescent lamps (CFLs). Full text of this WH&LA Advisory can be found here by clicking the August 25, 2011 link. (This link is password protected for lodging members only. Email Michelle in the WH&LA office or call 262/782-2851 if you need help logging in.)

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It seems like another e-mail scam creeps into an inbox near you on a daily basis. Particular to the lodging industry is a scam typically involving a foreign agent looking to book a number of rooms for an extended period of time for several people. The request is made to pay in advance (with an illegitimate or otherwise unlawful) credit card and a partial refund or transfer to a third party is almost immediately requested.

WH&LA sent out a detailed scam warning to member properties in November 2008, including tips for spotting scam e-mails:

E-mail scams that ask to pay a large sum plus money to “wire” to a third party are almost always scams based in Nigeria or Indonesia. The scammers willingly pre-pay for requested rooms with either a credit card number that was stolen or send a fraudulent cashier’s check from a non-existent bank. Almost immediately after, they make a change to the reservation, such as canceling one of the travelers, shortening the length of stay, etc. They ask you to either wire a refund or issue a cashier’s check for this smaller (but still substantial) amount. While the requests may seem legitimate, the scammer’s payment to you will be worthless and they will have your money.

Precautions to keep in mind:
- If you think an offer received by e-mail is too good to be true, it most likely is.
- If you believe the credit card number provided may be stolen, do not process the card. You may be stuck with chargeback fees from the credit card company when the legitimate cardholder disputes the charge on their stolen credit card.
- Do not place any international calls to the potential scammer. Automatic re-direct services make it possible for these criminals to route calls from what appears to be a UK phone number to anywhere in the world, and you may incur a per-minute fee in addition to the long distance fees on your local telephone bill.

The specific origin of these e-mails is incredibly difficult to determine, and resources are not typically available to attempt to find and prosecute the perpetrators. If you think you may be dealing with an attempt to make a fraudulent reservation, ask the person to fax or email a photocopy of the front and back of their credit card and a copy of a state-issued identification card. Let the person know that their credit card will not be charged in any way until they check in on-site at your property, and that will likely be the last you hear from them.

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Hotel guests’ credit card data is targeted more than any other industry, even with continuously evolving PCI Data Security Standards. Training staff that deals directly with guests and calls to the hotel is key to preventing security breaches. And, of course, updates on new scams.

A new scam involving lodging property gift cards was brought to our attention by WH&LA Associate Member Tom Haase of SaleSynergy:

Multiple gift cards were purchased over the phone for a stay at the property with what appeared to be a valid Discover card. All of the typical phone transaction safeguards were in place, including requesting the CVV number from tbe back of the card, address verification, etc. These safeguards did not prevent the fraud from occuring – it was discovered when the legitimate cardholder received the receipt for the transaction. The person on the phone placing the order was a scammer and had somehow acquired the card data.

The next level of protection that would have potentially prevented the scam would be to request a copy of the front and back of the caller’s Drivers License and the card being used to pay for the transaction. The copies would need to be faxed to the property before the transaction could be completed. Unfortunately, this is not a 100%-effective fraud prevention, but the additional layers of security will help deflect attempts at this particular type of scam.

Thanks for the head’s up, Tom!

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It seems like a host of scams and fraud schemes have resurfaced in the past month. According to this New York Times article (free registration required), 38% of credit card hacking cases last year involved the hotel industry:

“Why hotels? Well, to paraphrase the bank robber Willie Sutton, hackers hit hotels because that is where the richest vein of personal credit card data is. At hotels with inadequate data security, ‘the greatest amount of credit card information can be obtained using the most simplified methods,’ said Anthony C. Roman, a private security investigator with extensive experience in the hotel industry.

The sophistication of such systems can vary widely from one hotel to the next, even within the same corporate chain, making it an easy route for hackers.”

A June 29th report from the Columbus, WI Police Department tells of a new twist on the wire fraud scam. A person claiming to be a representative of the local sherrif’s department called two separate restaurants advised management that one of their restaurant employees was in custody for operating while intoxicated and needed to be bailed out. It was requested that the restaurant wire $800 to a bail bondsman in Georgia, and upon reciept of the money, the employee could be picked up from jail. The caller was even able to give the name of a restaurnat employee that was “in custody” and identified himself in one of the calls with the last name of Davis. One of the calls resulted in an $800 wire transfer and the scam was not detected until the restaurant attempted to locate their employee in jail. Heard of a similar phone scam in your area? Notify Lt. Dennis Weiner of the Columbus Police Department at 920/623-6046.

Have you encountered strange phone calls trying to scam you or your property out of money? Any that were particularly convincing? We want to hear about them – share your stories in the comments section. The more people who know about new or seemingly legitimate scams, the less who will fall victim to them.

Local reports of credit card fraud include a problem specific to properties that utilize satellite transponders to communicate credit card transactions. According to Tom Haase of SaleSynergy, only about 1% of lodging properties use transponders, so the threat isn’t huge – an overwhelming majority of  business utilize “hardline” processing, which transmits the data securely over a phone line.

Scammers will locate the transponder on the side of a building or mounted to the ground, cover it with aluminum foil and then enter the business and attempt to use fraudulent credit cards to make purchases. Since the aluminum foil has interrupted the satellite communication, the scammer may be able to make a purchase and exit the business before the business is able to determine that the credit card communicaiton system is down.

“Keep in mind this is not a scenario where we are talking about hacking into secur, PCI-compliant storage,” Haase said, “but rather stealing card numbers one or two at a time.”

The Wisconsin Division of Trade & Consumer Protection has identified additional electronic and telephone-related scams. In the “stranded friend online scam,” a Facebook friend may send you a message or leave you a note on your wall saying they are overseas and in need of quick cash. The FBI has seen numerous reports of social networking accounts being compromised and used to convince “friends” to wire money overseas. The amount of money scammed in this kind of online fraud doubled in 2009 to $560 million. Family of WH&LA staff has even been a target of this kind of scam perpetrated via telephone – someone calls claiming to be “your grandson” or “your nephew” and hopes you offer up some names – “Andy, is that you?” From there the scammer will relay a story about being overseas, in a car accident with a broken cell phone – and in really desperate need of money. The entire scenario can happen very quickly, and before you can think to call around and see if your nephew or godson or granddaughter is really overseas, you could be out hundreds of dollars.

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From the Milwaukee Journal Sentinel:

The Better Business Bureau is warning businesses of a new phishing scam e-mail that pretends to be from the consumer agency. The body of the e-mail claims that the company did not respond to a complaint filed by a Jason Harlow (other names may be used) and includes a link to a page at www.ca-bbb.org where the business can supposedly review the complaint. Because the message is fraudulent, BBB advises any business that receives this e-mail to take the following steps:

• Do not click on any links or reply to the message,
• Forward the message to phishing@council.bbb.org,
• Delete the message from your inbox and deleted mail folder, and run a full virus scan on your computer if you clicked on links or downloaded files.

WIA also reminds lodging property managers and those who take reservations by e-mail to watch for reservation requests that seem “too good to be true.” Scammers hit lodging property inboxes with requests to book several rooms for a week or more and always want to prepay weeks in advance with a credit card. After the credit card is charged, the scammer will modify the reservation and request a partial refud. Because the card number is fraudulent, the payment will not process and the lodging property will have lost any money refunded. In certain cases, scammers will prepay an extra dollar amount, requsting the overpayment be transferred to a third party (travel agent, interpreter, etc.). Your property will be liable for the entire amount on the credit card when your processing company flags the card as fraudulent.

Not sure if you’ve got a fraudulent e-mail? Forward it to Michelle in the WIA office and she’ll help you spot any warning signs.

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