Current standard-issue American credit cards store personal information in a magnetic stripe on the back of the card. EMV cards, however, store information on a secure computer chip,which generates a one-time-use security code for every transaction, making counterfeiting virtually impossible, according to the EMV Migration Forum, a consortium of industry players that support EMV chip implementation across the United States.
Credit card security is a topic top of mind for any business that processes consumer payment data, and this October the stakes for U.S. businesses—including hotels—to comply with the latest wave of payment security will get higher.
It’s all part of a continuing wave for the United States to widely adopt EMV chip credit cards, which reduce counterfeiting and card fraud, but which require hardware and software upgrades on the part of the party processing the payment.
Beginning in October, new compliance language will shift the burden of liability for some types of fraudulent credit card transactions away from banks and ultimately on to merchants. Hoteliers who know these new liability burdens and are actively implementing technology upgrades to read these new cards will come out ahead, legal and technology sources said.
Knowing the reasons behind the change and the implications of noncompliance will help hoteliers make a seamless transition, sources said.
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The city of Dallas has had enough, and late Thursday filed suit against the owners of the motel that looks decent enough on the outside but is anything but on the inside, according to the City Attorney’s Office. The city wants the court to order the owners to clean it up immediately or face thousand-dollar-a-day penalties until the laundry list of problems are remedied.
In early December, two men were shot and another man was injured (after he jumped out a window to escape being shot) at the Orange Extended Stay Motel on Finnell Street in Northwest Dallas, near Northwest Highway and N. Stemmons Freeway. Several residents told our Naheed Rajwani at the time they feel unsafe at the Orange and that, perhaps, it was time to move away from the crime-ridden (and poorly reviewed) hotel. Said one woman, “I’m scared, and I don’t want to end up losing my life being in this area.”
She had good reason to be concerned: On May 30, someone was shot to death at the hotel.
The city of Dallas has had enough, and late Thursday filed suit against the owners of the motel that looks decent enough on the outside but is anything but on the inside, according to the City Attorney’s Office. The city wants the court to order the owners — Carrollton-based Dynasty Hotel Group — to clean it up immediately or face thousand-dollar-a-day penalties until the laundry list of problems are remedied.
“The relatively well kept facade of this business belies the abhorrent physical conditions, habitual drug offenses, and violent crime that have pervaded its interior and for which the property has become known,” says the suit, signed by Assistant City Attorney Melissa Miles.
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“Regardless of the content of the call, hoteliers should be ensuring that they are using automatic disclosures—in order to obtain consumer consent—if using an automatic recording system. If an operator becomes the target of one of these consumer privacy class actions, taking an aggressive approach and attacking these claims as incongruent with the legislative purpose and intent behind the respective statute is a recommended.”
In the past few years, class action plaintiffs have recovered billions of dollars in punitive damages by exploiting strict liability laws that punish businesses for failing to properly notify customers when a phone call is being recorded.
Under the Federal Telephone Consumer Protection Act and similar state statutes, businesses including hotels are prohibited from using certain tactics when telemarketing or making calls to solicit potential guests or customers. Hotels and other businesses are precluded from making calls or using any kind of prerecorded message, unless the caller has obtained a recipient’s prior express consent in writing or electronically.
Additionally, hoteliers are prohibited from making calls to residences before 8 a.m. and after 9 p.m., and a future hotel guest calling to confirm a reservation also must be notified if the call is recorded. Hence, under these laws, if a hotel receptionist in Montana receives a call from a California resident to confirm a reservation but never notifies the recipient that the call is being recorded, it could result in damages ranging from $500 to $5,000 per call under federal and state laws.
This seemingly innocuous business practice of recording customer service calls without providing some variation of the oft-heard disclosure, “This call may be monitored or recorded for quality assurance purposes” has the potential to financially cripple a business.
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“It was being used to circumvent case law and proper court procedure to obtain privacy information,” Seiders said. “The police were using these local laws to avoid having to go through judicial review. I think that’s where it became abusive.
More than a decade ago, a group of hotel owners sued Los Angeles. Now their actions have caused reverberations in hotels throughout the country.
The U.S. Supreme Court ruled June 22 in City of Los Angeles v. Patel that the police practice of asking for a hotel’s guest registry without a warrant is unconstitutional.
“It’s certainly providing privacy protection and extending it to companies, both to the company owner and the guests that are there. It’s certainly a win for the hotels,” Attorney Dana Kravetz said.
“This is going to have widespread impact – and already has had widespread impact – on a host of cities and really the industry at large. It’s a powerful decision. It really sets it out pretty clearly as to what the police can or cannot do.”
This ruling goes beyond Los Angeles as so many other U.S. cities have similar ordinances, said Kravetz, managing partner of Michelman & Robinson and chair of the law firm’s hospitality group.
“It’s really a great day for the hotel industry,” said Frank Weiser, the attorney for the group of hotel owners (Patel). “It’s a great day for businesses throughout America.”
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To prevent any type of scam, Bragiel suggests that hoteliers establish reliable contacts within banks, businesses, and the hotel’s credit card processor. That way, if questions of authenticity arise, the front desk staff can turn to trusted sources. “When in doubt, we always encourage our members to check with the folks they have relationships with,” says Bragiel
It could be disguised as a typical guest interaction: Someone checks in under a corporate account that does not require a credit card, only for management to later realize the guest was not an employee of the company. Or, it could be someone whose credit card fails to go through, so he or she provides the clerk with a false authorization code. Both of these scenarios are common lodging industry scams, pulled by con artists who exploit front desk protocols to get a free stay, and oftentimes managers don’t even know what happened until the guest is long gone.
Fraud is a growing issue in the United States, with retailers losing $32 million in 2014 to credit card scamming, up from $23 million in 2013, according to a recent Business Insider report. For hoteliers to avoid becoming a victim of one of these cons, it is important that they not only recognize the signs of common industry scams but also learn how to be proactive in protecting a property from vulnerability.
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Videos can make or break a case. For example, in one case, video footage clearly showed that the plaintiff initiated the fist fight that was at the heart of his lawsuit. The video would have absolved the hotel from all liability, but the hotel failed to properly preserve this key piece of evidence.As a result, the case had to be settled instead of vigorously defended. Further, as digital surveillance systems continue to become the industry standard, judges have been less forgiving when it comes to claims that the pertinent footage was either lost or never preserved.
By the time a case reaches an attorney’s desk, all too often pertinent evidence either has been lost — or was never collected in the first place. California’s statute of limitations for a personal lawsuit is two years; consequently, an attorney’s first involvement in an incident on your property usually happens more than two years after the incident has occurred. If your hotel or resort has not properly gathered and preserved evidence, it becomes very challenging to recreate what transpired. Hence, it is imperative that; your hotel have formal written evidence retention policies; that first responders and security teams are properly trained on how to gather the evidence; and that hotel staff take steps to ensure that this evidence is preserved. Failing to collect and preserve evidence can turn a defensible case into a major settlement.
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“O’Meara, an attorney, is Nebraska’s new human trafficking coordinator. He wants people to be aware so victims can be rescued…”What happens is the victim is convinced by the trafficker (that) the only value the victim has as a human being is the ability to make money through commercial sex acts for the pimp,” O’Meara said…Omaha’s upscale Magnolia Hotel was the first to train hospitality workers to spot sex trafficking.”
Local law enforcement is trying to educate hotel workers to recognize signs of sex trafficking. The hope is to rescue women often caught in a cycle of abuse, violence and neglect.
“I was petrified to go outside,” Melissa said.
She said that for more than three years, she was forced to sell herself for money.
“The brain-washing, psychological games — it takes years,” Melissa said.
She wants Omaha to know that prostitution is slavery, with a pimp in charge of every move.
“I just wasn’t allowed out of his sight,” Melissa said.
Her message is the same one shared as part of a new pilot program in Omaha, which trains hotel workers to spot and report sex trafficking.
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