What is Crowne Plaza's responsibility regarding fraudulent activity and transactions that occur in connection with their Merchant Account or through their Merchant Systems?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.5 You Are Responsible for Your Merchant Account and Merchant Systems. You are exclusively responsible for: (a) all activity and transactions (including fraudulent activity and fraudulent transactions) that occur in connection with your Merchant Account or through your Merchant Systems, regardless of whether such activity and transactions are undertaken by authorized personnel, unauthorized personnel, Merchant Providers, or other Third Parties; (b) ensuring that the Merchant Account and Merchant Systems, including any point-of-sale equipment, terminals, and gateways, are used in accordance with the Agreement and are secure; and (c) implementing appropriate controls to prevent your authorized personnel, your unauthorized personnel, and Third Parties from submitting credits, voids, and other transactions that are not bona fide transactions. For avoidance of doubt, you are exclusively responsible and liable for: (x) all transactions sent to us for processing through your Merchant Account or Merchant Systems (including fraudulent transactions); (y) all use of the Services; and (z) all related Servicers Fees, Third Party Based Fees, Chargebacks, and other amounts, whether arising from bona fide, unauthorized, or fraudulent activities or transactions.
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).
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.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the franchisee is exclusively responsible for all activity and transactions, including fraudulent ones, that occur in connection with their Merchant Account or through their Merchant Systems. This responsibility applies regardless of whether the activity is undertaken by authorized personnel, unauthorized personnel, Merchant Providers, or other Third Parties.
This means that Crowne Plaza franchisees bear the full financial burden of any fraudulent transactions processed through their systems. This includes responsibility for all transactions sent for processing, all use of services, and all related Servicers Fees, Third Party Based Fees, Chargebacks, and other amounts, whether arising from legitimate, unauthorized, or fraudulent activities. Franchisees must ensure their Merchant Account and Systems are secure and used according to the agreement, implementing controls to prevent unauthorized transactions.
To mitigate these risks, Crowne Plaza franchisees should prioritize data security measures and compliance with Card Organization Rules, including the Payment Card Industry Data Security Standard (PCI DSS). They should also carefully vet and monitor any Merchant Providers they use, as the franchisee is responsible for their compliance as well. Using security features like CAPTCHA, velocity filters, and Address Verification Service (AVS) can also help combat fraud, though AVS does not guarantee a transaction is valid.