First Fraud

[Generic]

We ran a special where we accepted prepayment by CC.
Well, I got an email yesterday asking about a charge. It appears someone used his CC number. I was told it was a father paying for his son's stay, so he didn't have the card.
How does this process work? Will the CC company send me back the fraud charge?

 

[Madeleine]

You got an email from the 'owner' of the cc stating the charge was not authorized by him? So, the stay was paid for with either a stolen card or the person who originally authorized the use has now changed his mind or is attempting to get the stay for free? Or, never originally auth'd the charge and someone near and dear to his wallet got a free stay?
I guess my first response back would be that this was the card number you were given by the guest and the guest signed the receipt on arrival. (Did they?)
This is one reason I hate third party payments.
Anyhoo, if the emailer says the card has not been reported stolen, I'm not sure where you stand. If the guest signed the receipt on arrival, I would let the emailer know you have a signature on the cc receipt.

 

[Generic]

You got an email from the 'owner' of the cc stating the charge was not authorized by him? So, the stay was paid for with either a stolen card or the person who originally authorized the use has now changed his mind or is attempting to get the stay for free? Or, never originally auth'd the charge and someone near and dear to his wallet got a free stay?
I guess my first response back would be that this was the card number you were given by the guest and the guest signed the receipt on arrival. (Did they?)
This is one reason I hate third party payments.
Anyhoo, if the emailer says the card has not been reported stolen, I'm not sure where you stand. If the guest signed the receipt on arrival, I would let the emailer know you have a signature on the cc receipt..

Never originally authorized the charge and someone used his card to stay free. I couldn't get a signature because it was the father in Europe paying for his adult son's stay.
So basically, he is going to contest the charge and I don't have a foot to stand on. Frankly, I would just rather reverse it, because I assume it's too late. I'm out the money... but what do I do with the CC company, etc.

 

[gillumhouse]

You got an email from the 'owner' of the cc stating the charge was not authorized by him? So, the stay was paid for with either a stolen card or the person who originally authorized the use has now changed his mind or is attempting to get the stay for free? Or, never originally auth'd the charge and someone near and dear to his wallet got a free stay?
I guess my first response back would be that this was the card number you were given by the guest and the guest signed the receipt on arrival. (Did they?)
This is one reason I hate third party payments.
Anyhoo, if the emailer says the card has not been reported stolen, I'm not sure where you stand. If the guest signed the receipt on arrival, I would let the emailer know you have a signature on the cc receipt..

Never originally authorized the charge and someone used his card to stay free. I couldn't get a signature because it was the father in Europe paying for his adult son's stay.
So basically, he is going to contest the charge and I don't have a foot to stand on. Frankly, I would just rather reverse it, because I assume it's too late. I'm out the money... but what do I do with the CC company, etc.
.

I would not do anything - period - until I heard from the CC company. IF they reverse it , just do not contest it. BUT wait to see if they actually du sonething. As it stands, it sounds as if they are just testing the waters to see what YOU will do.

 

[Joey Camb]

Ive never had a problem with this but apparently they simply yank the money back when the customer reports the fraud so I wouldn't refund it or you may end up paying twice. I would say have you reported the fraud to the bank? I will look forward to hearing from them.

 

[Madeleine]

You got an email from the 'owner' of the cc stating the charge was not authorized by him? So, the stay was paid for with either a stolen card or the person who originally authorized the use has now changed his mind or is attempting to get the stay for free? Or, never originally auth'd the charge and someone near and dear to his wallet got a free stay?
I guess my first response back would be that this was the card number you were given by the guest and the guest signed the receipt on arrival. (Did they?)
This is one reason I hate third party payments.
Anyhoo, if the emailer says the card has not been reported stolen, I'm not sure where you stand. If the guest signed the receipt on arrival, I would let the emailer know you have a signature on the cc receipt..

Never originally authorized the charge and someone used his card to stay free. I couldn't get a signature because it was the father in Europe paying for his adult son's stay.
So basically, he is going to contest the charge and I don't have a foot to stand on. Frankly, I would just rather reverse it, because I assume it's too late. I'm out the money... but what do I do with the CC company, etc.
.

I would wait. If you reverse the charge and he does a charge back, you're out twice. Because it will take an act of Congress/Parliament to get the money back.
So, this begs the question...if someone books stating they are using another person's card, should we all be getting the signature of the person who shows up?
If you choose to refund the money, ask the emailer for the bank the card is written on and contact the bank directly. You want to be sure they know you are doing this. Because that is who the cardholder is going to contact, not your processor. There is a way to figure out the bank by the card numbers but I don't know how to do that.
If the bank is in Europe, email.

 

[Madeleine]

Ive never had a problem with this but apparently they simply yank the money back when the customer reports the fraud so I wouldn't refund it or you may end up paying twice. I would say have you reported the fraud to the bank? I will look forward to hearing from them..

Ive never had a problem with this but apparently they simply yank the money back when the customer reports the fraud so I wouldn't refund it or you may end up paying twice. I would say have you reported the fraud to the bank? I will look forward to hearing from them.

Good point about asking if they are going to pursue this as fraud from their side and not just 'say' it is fraud. If they report it, then it is on file that the card was misused and the cardholder may have to be reissued a new card. And then they have to go thru all the hoops to change everything and they may decide to pursue the son for the money. IF it even was the son!

 

[Generic]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim.

 

[Madeleine]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

Interesting. So, the guy isn't going to claim fraud to his cc company because he might also have to explain how the loser got his cc number. He wants you to pony up because he couldn't keep his pants on. I'm curious now why you should lose out? Maybe the guy got a fairly cheap lesson out of this one.
And you're not sure you really know the name of the person who stayed with you. Do you ask for ID?
(As an aside, I don't really care who did what to whom, I'm concerned that you're being asked to pay for someone else's indiscretion.)

 

[muirford]

I'm with Maddy - deal with the credit card company only on this. If what he's telling you is true, he should be reporting the fraud. It could be that he's just trying to put one over on you - that the credit card was used with his knowledge but now he doesn't want to pay the charge. Sounds hinky to me even without the TMI of what happened.
I always get signatures on third party receipts - I should probably get ID also, but I do get a signature. We only get a few each year but it would be smart to have a better process. Or just not do them at all - find a prepayment process that works.

 

[Happy Keeper]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

I love the intrigue but i couldn't quite figure out the sequence of events. Better yet, I was hoping to hearing the final outcome!

 

[Madeleine]

I'm with Maddy - deal with the credit card company only on this. If what he's telling you is true, he should be reporting the fraud. It could be that he's just trying to put one over on you - that the credit card was used with his knowledge but now he doesn't want to pay the charge. Sounds hinky to me even without the TMI of what happened.
I always get signatures on third party receipts - I should probably get ID also, but I do get a signature. We only get a few each year but it would be smart to have a better process. Or just not do them at all - find a prepayment process that works..

I always get signatures on third party receipts - I should probably get ID also, but I do get a signature. We only get a few each year but it would be smart to have a better process. Or just not do them at all - find a prepayment process that works.

I request that third party bookings buy a GC that is sent to the name on the cc. If they refuse, I explain we cannot accept a cc if the person is not going to be here to sign for it.

 

[user 26]

Do not ever reverse a charge in such a situation. You let the person whose card it is go through their bank to contest the charge Let them determine the validity of the claim and let it stand since you are not going to dispute it.
I had someone pay for a room by credit card. I went out the door and across the road and her husband came to my helper and paid for the same room with a check. Just handed it in and it was deposited. It took a couple days to sort it out but I refunded the money to the husband by check. I was the one who discovered the double payment, not them.
Well, long story short, the woman heard that 'he had paid too' and was determined to contest the cc charge.
She won and the cc company took it back from my account with them. I sent her and the banks a copy of my cancelled check but the bank told me to take it up with the husband who never acknowledged anything. She felt vidicated because she felt I had tried to do something wrong.
So I was out the money. And there was no 'double charge' intended. It was just a mistake. She would not listen, insisted to her cc company and to her doddering husband that the money had not been refunded.
I was very upset and wish I'd just let things take their course via the banks.

 

[Generic]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

Interesting. So, the guy isn't going to claim fraud to his cc company because he might also have to explain how the loser got his cc number. He wants you to pony up because he couldn't keep his pants on. I'm curious now why you should lose out? Maybe the guy got a fairly cheap lesson out of this one.
And you're not sure you really know the name of the person who stayed with you. Do you ask for ID?
(As an aside, I don't really care who did what to whom, I'm concerned that you're being asked to pay for someone else's indiscretion.)
.

No. I wouldn't even consider reversing the charge without a police report or via the CC company. He already reported the fraud, so I'm expecting a chargeback. I've just never been through this.
Earlier today, when I was thinking about things it came to me that this might be the case. And I started the equiry. He was happy enough when I simply told him what we were (since I assume he saw the online charge) and I didn't elaborate or anything.
I actually put together the pieces before he did. But he did in fact have a picture of the person. I told him to submit it to the CC security department. He bought airplane tickets with the card, so they should be able to follow who's name the tickets were in and the passport used to board the plane.
For me, it's the loss of four nights. I will simply wait for the CC to reverse it. But it's really the first time I have ever had even the whiff of a chargeback.

 

[Madeleine]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

Interesting. So, the guy isn't going to claim fraud to his cc company because he might also have to explain how the loser got his cc number. He wants you to pony up because he couldn't keep his pants on. I'm curious now why you should lose out? Maybe the guy got a fairly cheap lesson out of this one.
And you're not sure you really know the name of the person who stayed with you. Do you ask for ID?
(As an aside, I don't really care who did what to whom, I'm concerned that you're being asked to pay for someone else's indiscretion.)
.

No. I wouldn't even consider reversing the charge without a police report or via the CC company. He already reported the fraud, so I'm expecting a chargeback. I've just never been through this.
Earlier today, when I was thinking about things it came to me that this might be the case. And I started the equiry. He was happy enough when I simply told him what we were (since I assume he saw the online charge) and I didn't elaborate or anything.
I actually put together the pieces before he did. But he did in fact have a picture of the person. I told him to submit it to the CC security department. He bought airplane tickets with the card, so they should be able to follow who's name the tickets were in and the passport used to board the plane.
For me, it's the loss of four nights. I will simply wait for the CC to reverse it. But it's really the first time I have ever had even the whiff of a chargeback.
.

Holy cow, that's a big loss. So, are you making any changes to avoid this sort of thing in the future? Just curious what it is we can do to protect ourselves. Because it's obvious the cc company doesn't eat any problem charges, we do. Do we only accept card-in-hand transactions? No third party transactions?

 

[Kay Nein]

I've worked as a bookkeeper for over 15 years and have dealt with many chargebacks for my clients. I completely agree with the others that recommend you wait and let the credit card companies sort it out. His card will notify your credit card processor that the charge is being disputed. You should receive a notice saying that the card holder has disputed the charge. You will be given a certain amount of days to produce proof of authorization (ie: signed receipt) and submit that to your processor. They will turn around and give that to the card holder's processor and the two of them will determine whether the charge will be reversed or not.
If you refund the money, you are admitting fault (harsh words, but you get the point). Let them sort it out. Your credit card processor is on your side and will try to fight for you on this issue. If you don't have the proof they need to back up your side, then they have to admit fault and reverse the charge. And most likely the chargeback process will continue separate from any refund you process, so you very well might end up with two refunds and no way to get it back.
Also, you should always get a signature on the receipt. In this case, if you had received a signature and written on it "on behalf of the cardholder" they would have more evidence to pursue that individual for fraud. I would recommend that if you have someone signing that is not the card holder, get their identification and write it on the receipt - drivers license #, name, DOB. If they refuse to give you their ID, then your flags go up. If they do give it to you & it turns out to be fraud, you've just turned them in.

 

[Madeleine]

I've worked as a bookkeeper for over 15 years and have dealt with many chargebacks for my clients. I completely agree with the others that recommend you wait and let the credit card companies sort it out. His card will notify your credit card processor that the charge is being disputed. You should receive a notice saying that the card holder has disputed the charge. You will be given a certain amount of days to produce proof of authorization (ie: signed receipt) and submit that to your processor. They will turn around and give that to the card holder's processor and the two of them will determine whether the charge will be reversed or not.
If you refund the money, you are admitting fault (harsh words, but you get the point). Let them sort it out. Your credit card processor is on your side and will try to fight for you on this issue. If you don't have the proof they need to back up your side, then they have to admit fault and reverse the charge. And most likely the chargeback process will continue separate from any refund you process, so you very well might end up with two refunds and no way to get it back.
Also, you should always get a signature on the receipt. In this case, if you had received a signature and written on it "on behalf of the cardholder" they would have more evidence to pursue that individual for fraud. I would recommend that if you have someone signing that is not the card holder, get their identification and write it on the receipt - drivers license #, name, DOB. If they refuse to give you their ID, then your flags go up. If they do give it to you & it turns out to be fraud, you've just turned them in..

Thanks, good info on getting ID.

 

[Generic]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

Interesting. So, the guy isn't going to claim fraud to his cc company because he might also have to explain how the loser got his cc number. He wants you to pony up because he couldn't keep his pants on. I'm curious now why you should lose out? Maybe the guy got a fairly cheap lesson out of this one.
And you're not sure you really know the name of the person who stayed with you. Do you ask for ID?
(As an aside, I don't really care who did what to whom, I'm concerned that you're being asked to pay for someone else's indiscretion.)
.

No. I wouldn't even consider reversing the charge without a police report or via the CC company. He already reported the fraud, so I'm expecting a chargeback. I've just never been through this.
Earlier today, when I was thinking about things it came to me that this might be the case. And I started the equiry. He was happy enough when I simply told him what we were (since I assume he saw the online charge) and I didn't elaborate or anything.
I actually put together the pieces before he did. But he did in fact have a picture of the person. I told him to submit it to the CC security department. He bought airplane tickets with the card, so they should be able to follow who's name the tickets were in and the passport used to board the plane.
For me, it's the loss of four nights. I will simply wait for the CC to reverse it. But it's really the first time I have ever had even the whiff of a chargeback.
.

Holy cow, that's a big loss. So, are you making any changes to avoid this sort of thing in the future? Just curious what it is we can do to protect ourselves. Because it's obvious the cc company doesn't eat any problem charges, we do. Do we only accept card-in-hand transactions? No third party transactions?
.

Well, I still have to think about it, but I won't do any third-party charges like that again.
I don't really like doing any transactions that aren't card-in-hand in any case. And in Canada we have the chip&pin transactions in any case. And to be honest, they make me feel much more secure and we have less trouble with foreign transactions this way. I wasn't really comfortable with charging people without the card in hand before this and I'm less comfortable with it, now.
At least it was nights when I wasn't full, so I didn't turn away paying guests for this. We have been ripped off three times in our long history of running B&Bs and every single time they guests were American. Not a good record.

 

[Generic]

I've worked as a bookkeeper for over 15 years and have dealt with many chargebacks for my clients. I completely agree with the others that recommend you wait and let the credit card companies sort it out. His card will notify your credit card processor that the charge is being disputed. You should receive a notice saying that the card holder has disputed the charge. You will be given a certain amount of days to produce proof of authorization (ie: signed receipt) and submit that to your processor. They will turn around and give that to the card holder's processor and the two of them will determine whether the charge will be reversed or not.
If you refund the money, you are admitting fault (harsh words, but you get the point). Let them sort it out. Your credit card processor is on your side and will try to fight for you on this issue. If you don't have the proof they need to back up your side, then they have to admit fault and reverse the charge. And most likely the chargeback process will continue separate from any refund you process, so you very well might end up with two refunds and no way to get it back.
Also, you should always get a signature on the receipt. In this case, if you had received a signature and written on it "on behalf of the cardholder" they would have more evidence to pursue that individual for fraud. I would recommend that if you have someone signing that is not the card holder, get their identification and write it on the receipt - drivers license #, name, DOB. If they refuse to give you their ID, then your flags go up. If they do give it to you & it turns out to be fraud, you've just turned them in..

I wouldn't process a refund, I realize that the CC processor has to do it.
I think I will avoid all 3rd party transactions in the future. And I think I will go back to my old habit of payment on arrival with card in hand. I'm much happier that way, especially when the transactions are processed via chip & pin.

 

[Madeleine]

Well, I started to think back about this particular guest and I had a guess at what happened. So I asked the guy who's CC was supposedly stolen an indelicate question and well... I was right. And now I also know why that guest left on that particular day from our place.
It appears that this guest apparently steals people CC numbers during short lived sexual encounters (ie one-night stands) and well, he had one the night before he left our place. Of course, I don't know the name of the person that the guest slept with, but I assume that they were the next victim..

Interesting. So, the guy isn't going to claim fraud to his cc company because he might also have to explain how the loser got his cc number. He wants you to pony up because he couldn't keep his pants on. I'm curious now why you should lose out? Maybe the guy got a fairly cheap lesson out of this one.
And you're not sure you really know the name of the person who stayed with you. Do you ask for ID?
(As an aside, I don't really care who did what to whom, I'm concerned that you're being asked to pay for someone else's indiscretion.)
.

No. I wouldn't even consider reversing the charge without a police report or via the CC company. He already reported the fraud, so I'm expecting a chargeback. I've just never been through this.
Earlier today, when I was thinking about things it came to me that this might be the case. And I started the equiry. He was happy enough when I simply told him what we were (since I assume he saw the online charge) and I didn't elaborate or anything.
I actually put together the pieces before he did. But he did in fact have a picture of the person. I told him to submit it to the CC security department. He bought airplane tickets with the card, so they should be able to follow who's name the tickets were in and the passport used to board the plane.
For me, it's the loss of four nights. I will simply wait for the CC to reverse it. But it's really the first time I have ever had even the whiff of a chargeback.
.

Holy cow, that's a big loss. So, are you making any changes to avoid this sort of thing in the future? Just curious what it is we can do to protect ourselves. Because it's obvious the cc company doesn't eat any problem charges, we do. Do we only accept card-in-hand transactions? No third party transactions?
.

Well, I still have to think about it, but I won't do any third-party charges like that again.
I don't really like doing any transactions that aren't card-in-hand in any case. And in Canada we have the chip&pin transactions in any case. And to be honest, they make me feel much more secure and we have less trouble with foreign transactions this way. I wasn't really comfortable with charging people without the card in hand before this and I'm less comfortable with it, now.
At least it was nights when I wasn't full, so I didn't turn away paying guests for this. We have been ripped off three times in our long history of running B&Bs and every single time they guests were American. Not a good record.
.

We have been ripped off three times in our long history of running B&Bs and every single time they guests were American. Not a good record.

E- I'm finally going to have to ask you to stop bashing Americans. You do it rather frequently and it doesn't improve the dialog a bit.
The 'Americans did this' comment didn't add anything to your problem/solution and I find it annoying when you do this. Maybe we could all try to avoid bashing people who are not the same as we are, whatever that is.
If your purpose IS to annoy me or other Americans on this forum, congratulations, you succeeded. If, instead, you like hanging around here and discussing the trials and tribulations of innkeeping and didn't realize you were overly critical of your southern neighbors here's my request- please knock off the American-bashing.