What must a Crowne Plaza franchisee do to maintain fraud and chargebacks below the Card Organization thresholds?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.7 Data Security Measures; Fraud. Security features such as CAPTCHA, velocity filters, the Address Verification Service, and requiring a Card Verification Code for Card Not Present Transactions can help combat fraud.
Using AVS when submitting Authorization requests for Card Not Present Transactions can help you identify potentially fraudulent transactions and can help lower Card Organization interchange rates, but it does not guarantee a transaction is valid and the AVS response does not impact whether an Authorization request is approved or denied.
You are responsible for all Chargebacks, Third Party Based Fees, Servicers Fees, and other amounts arising from fraudulent activity processed through your Merchant Systems and/or your Merchant Account (regardless of any AVS response that you receive).
- 6.5 Excessive Chargebacks. If your Chargeback percentage for any line of business exceeds the estimated industry Chargeback percentage, you shall, in addition to the Chargeback fees and any applicable Chargeback handling fees or fines, pay us an excessive Chargeback fee for all Chargebacks occurring in such month in such line(s) of business.
Each estimated industry Chargeback percentage is subject to change from time to time by us in order to reflect changes in the industry Chargeback percentages reported by Visa, Mastercard or Discover.
- 6.6 Review of Statements and Notice of Errors. You agree to promptly and carefully review statements or reports provided or made available to you (physically, electronically, or otherwise and whether provided by us or Third Parties on our behalf) reflecting Card transaction activity (including activity in the Merchant Account, Settlement Account, or Reserve Account), and our fees and charges for the Services and other amounts due to or from you.
If you believe any discrepancies or errors exist, you must notify us in writing within ninety (90) days after the date of the related statement or reports.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, franchisees must adhere to specific data security measures and fraud prevention practices to manage chargebacks and fraudulent activities effectively. Crowne Plaza franchisees are responsible for all chargebacks, third-party-based fees, servicer fees, and other amounts resulting from fraudulent activity processed through their merchant systems or accounts, irrespective of any Address Verification Service (AVS) responses received.
To mitigate fraud, Crowne Plaza recommends using security features like CAPTCHA, velocity filters, the Address Verification Service (AVS), and requiring a Card Verification Code for Card Not Present Transactions. While AVS can help identify potentially fraudulent transactions and lower interchange rates, it does not guarantee transaction validity. Franchisees are also responsible for ensuring that any Merchant Providers they use comply with Card Organization rules, including security of cardholder data, registration processes, and periodic reporting.
If a Crowne Plaza franchisee or their Merchant Provider is determined to be the source of a data compromise event, they are responsible for promptly paying all related expenses, claims, assessments, fines, losses, costs, penalties, and issuer reimbursements imposed by the Card Organizations. Furthermore, franchisees must review statements and reports of card transaction activity for discrepancies or errors and notify the company in writing within 90 days of the statement date to ensure any necessary adjustments are made. Failing to maintain chargeback percentages below industry standards can result in excessive chargeback fees.