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< Back to news 03 January, 2009

Barclaycard warn of a fraud scam

Hotel Scam - Barclaycard Fraud investigators have made us aware of the following scam that a surprising number of hotels are being caught with...
An increasing number of merchants in the hotel trade are being tricked into taking telephone/email bookings, which subsequently turn out to be fraud.

The scam is that the merchant receives a telephone call, or various emails, requesting a group booking. The fraudster may well give a number of card numbers, frequently all from the same card issuer. They request the group booking and then ask what the value of the accommodation will be. The merchant is then asked to increase the value of the transaction by a further substantial amount and to transfer this extra amount into a nominated bank or building society account or to Western Union, a money transfer/exchange bureau.

As the card details are taken over the phone, the merchant is liable for the amount of the sale as it is a Card Not Present transaction, which can be charged back to the merchant. The hotel suffers a further loss in respect of the funds they have transferred to a third party.

The fraudsters never turn up for the allotted bookings and will quite often harass the merchant in getting the funds to this third party account as quickly as possible.

Any retailer taking such sales is liable for the debt re the sale and transfer of funds, so they must me made aware of the problem. The police force local to the merchant will often be reluctant to take any action as the perpetrator of the fraud is in another area. In the majority of cases we have seen, the fraudsters are operating from the London area and are targeting hotels in other parts of the country.

Merchants must be informed to call our Fraud Helpdesk on 01604 25 6600 or Customer Services Department on 0870 60 600 60.

Merchants must also be aware of the correct procedures for processing Card Not Present sales, and the risks involved, by using Address Verification Service and Card Verification Value. They should also be reminded that authorisation is not a guarantee of payment.