CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The use of online services or software with Internet access to defraud victims or to otherwise take advantage of them has become paramount in the society we live in today. A very common form of online fraud is the distribution of rogue security software. Internet services can be used to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme. Hospitality online transaction is not left out. Presently most hotels, resorts and tourism centers engaged in online transaction/payment such as room reservation and other services. Online fraud can occur in during the cause of reservation transaction. Online fraud could result from chat rooms, email, message boards, or on websites.

Hospitality reservation online fraud could occur in two ways. The first is when a criminal approaches the hotel management for online reservation and proposes a business transaction, and then uses fraudulent means to pay for it, using such as a stolen or fake credit card. As a result, the hotel management do not get paid for the transaction. The hotel who accepts credit cards may receive a chargeback for the transaction and lose money as a result.