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University of Technology, Jamaica

School of Business Administrations

Module: Business Research Methods

Tutor: Ms. Theresa Easy

Date: December 3, 2018

Title: Research proposal

Topic: An analysis of fraud prevention in selected hotels in Montego Bay Jamaica

Submitted in partial fulfilment of the requirement for the Bachelors of Science on Food

Service Management, Bachelors of Science in Finance and Banking and BSc. Accounting

Group Members

Shanice Green 1601833

Susan Elliot 1207712

Shantel Burgher 1600106

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Chapter 1: Introduction to the Research

Research Question

Shantel Burgher 1600106

What is put in place to achieve fraud prevention for hotels in the Montego Bay?

Background

Shantel Burgher 1600106

According to Donlea 2017 one of the main international issues to implement fraud protection

that causes great difficulties is that fraud tactics are constantly evolving each day. It is quoted

that “As one loopholes closes they inevitably find and exploit another”. With the upcoming

vision 2030 that states making Jamaica a better safer place to live, work and do business,

schaming has a become a major issues nationally for Jamaicans an example of an illegal

activity under fraud. The national security team is damping down and trying to find means

and ways ro implement protection. This is important because tourism is a major contribution

factor to foreign exchange in the world and Jamaica. With all the different fraudulent

activities occurring it places a stop pn the amount of tourists affecting profit, jobs and the

overall tourism industry.

Research Sub- Problems

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1. What are the fraud prevention training in place?

2. What are the fraud prevention policies in place?

3. What are the fraud prevention monitoring practices?

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Purpose of the study

Shanice Green 1601833

The purpose of this study was to analyse fraud prevention in selected hotels in Montego Bay

Jamaica. Specifically, this research seeks to investigate the following sub topics: i) What are

the fraud prevention control policies implemented, ii) What are the fraud prevention

monitoring practices and, iii) What are the fraud prevention training put in place.

Significance of the study

Shanice Green 1601833

The significance of this study is to benefit groups such as businesses, governmental

institutions, hotels, trade unions etc. It is the researchers hope that it will benefit readers as

the time to complete this project was time consuming. This study will benefit the hospitality

industries, hospitality and business students. This study will not benefit all scientific research.

Assumption

Susan Elliott 1207712

The assumption can be made that fraud within the hotel industry is an ongoing event which

needs proper monitoring, training of individuals on how best to pick up on or notice when a

fraudulent event has taken place.

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Limitation

Shantel Burgher 1600106

The information was not easily assessable has the hotels has strict policies when it comes to

fraud and giving out information on the topics and anything related to it.

Delimitations

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The study will not be conducted on all the hotels in Montego bay, it was only conducted on

three hotels in the Montego Bay being Sandals, Round Hill Villas and Resort and Iberostar

Grand Hotel Rose Hall All Inclusive Montego Bay with each catering to a different set of

tourist population needs.

Definition of terms

Shanice Green 1601833

Fraud can be defined as an intentionally deceptive action designed to provide the perpetrator

with an unlawful gain or to deny a right to a victim. Fraud control policies are systematic

measures such as reviews, checks and balances, methods and procedures instituted by an

organization to conduct its business in an orderly and efficient manner, deter and detect

errors, fraud, and theft and ensure adherence to its policies and plans

Fraud monitoring practices is the act of conducting a systematic and repeated sequence of

measurement, or observation of control parameters to assess whether a critical point is under

control.Fraud training can be defined as a training an employee undergoes that is factored

around the code of conduct, the risk of fraud, the employees' role in preventing fraud, and the

company's strong commitment to being a good corporate citizen.

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Chapter 2: Literature Review

Introduction

Shanice Green 1601833

The purpose of this study was to analyse fraud prevention in selected hotels in

Montego Bay Jamaica. Investopedia (2018) states that “fraud is an intentionally deceptive

action designed to provide the perpetrator with an unlawful gain or to deny a right to a

victim”. In addition “fraud is an act to induce another to part with some valuable item or

surrender a legal right” (business dictionary, 2018). It further defines prevention as activities

and practices aimed at anticipating, avoiding, and removing possible causes to preclude a

hazardous event from happening. This literature review was done using several global data

bases and the criteria for its inclusion in this chapter are that they are peer- reviewed and

published within 10 years of writing of this research report. The literature was reviewed

under the following headings, what are the fraud prevention control policies implemented,

what are the fraud prevention monitoring practices and what are the fraud prevention training

put in place.
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Name: Shanice Green

ID: 1601833

What are the fraud prevention policies implemented?

According to the business dictionary (2018) fraud control policies are “Systematic

measures such as reviews, checks and balances, methods and procedures instituted by an

organization to conduct its business in an orderly and efficient manner, deter and detect

errors, fraud, and theft and ensure adherence to its policies and plans”. Fraud policies are

important tools used to communicate an organization’s position, and processes, when it

comes to fraud Nieweler (2016).

Rorwana, Tengeh, and Musikavanhu (2015), conducted a research on a sample of grants

administrators and their clients (academic researchers) to analyse the relevance and

implications of fraud prevention policies at the University of Technology (UoT) in South

Africa. A quantitative approach was used with closed-ended and open-ended questions in a

questionnaire. In the study, the results indicated that both research grants administrators 71.4

%, and their clients 73% did not know if UoTx had a fraud control policy. They later agreed,

both research grants administrators and their clients (93% and 95% respectively) concurred

that a fraud prevention policy was necessary for UoTx. On the other hand, a study was done

to analysed fraud detection and prevention techniques and if there was a relationship between

the techniques and the detection of fraud. Through analysing 109 non-profits organisation

surveyed in South Carolina, the results indicated that 59 reported fraud occurrences and 86%

were using fraud detection and prevention techniques. This study showed statistical

significance in the relationships between fraud prevention and detection techniques used in

non-profits organisations and the detection of fraud Gibson (2018).

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PricewaterhouseCoopers’ Economic Crime Survey (2007) for fraud control and prevention

techniques implemented for Australian organisations identified that 71.4% of Australian fraud

was committed by internal perpetrators of organisations. The survey also indicated that 75%

use staff selection test, 43.3 % uses vender monitoring and 87.5% uses Ethical

guidelines/codes of conduct as polices for the prevention of fraud. According to the survey,

the vast majority of organisations in Australia and around the world have at least some

specific fraud prevention measures in place. In a study by the accounting research institute to

find out the perception of bankers towards the effectiveness of fraud prevention and detection

techniques in Malaysian Islamic banks, issued a total of 255 questionnaires to bankers in

local and foreign Islamic banks that operate in Malaysia. From the analysis, protection

software or application (mean = 3.1667) was perceived as the most effective components in

fraud mitigation strategies as compared to the other six groups of variables. This is followed

by process control (mean = 3.1575), organizational policy (mean = 2.9338), continuous

monitoring (mean = 2.9018), communication towards staff (mean = 2.8539), integrated fraud

control (mean = 2.8128) and the least effective one was inspection tools (mean = 2.5382),

Rahmana and Anwar (2014).

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Name: Susan Elliott

ID: 1207712

What are the fraud prevention monitoring practices?

According to Business Dictionary (2018), fraud prevention monitoring practices is the

act of conducting a systematic and repeated sequence of measurement, or observation of

control parameters to assess whether a critical point is under control. What drives individuals

to commit fraud within the organization with respect to how it can be monitored is a question

which should be analyzed and studied by financial personals. The study of fraud not only

helps to understand the past but even predict the future and how best to monitor it,

(Investiopedia, 2018).

The main aim of this research is to identify the different types of monitoring practices that

hotels can use to reduce the fraudulent activities within their organization. Fraud has a

detrimental impact on most businesses and the hospitality industry is not immune to it.

According to (Shah, 2018), a study by the Association of Certified Fraud Examiners, the

typical organization loses 5% of revenues in a given year as a result of fraud. For hotels,

industry statistics indicate that organizations lose 5% to 6% of annual revenue from fraud

perpetrated by employees and guests. For example, a hotel operator earning annual room

revenue of approximately $10 million may experience losses ranging between $500,000 and

$600,000. Losses from fraud would be amplified for organizations owning a chain of hotels.

Restaurants have a similar problem. He further went on to say that restaurants lose roughly

4% of revenue due to fraud as well, posing a significant obstacle for restaurants with thinner

net margins. Some controls to help prevent these types of frauds include maintaining a log for

complimentary and voided sales, requiring a reason for the comp or void to be documented,

requiring manager approval on all complimentary and voided transactions, and attaching a

comp or void slip to a guest check or invoice. If a particular front-desk clerk, server, or
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bartender has a higher percentage of complimentary or voided sales, an investigation should

take place. POS software can be used to compare data of an individual employee with the

restaurant data as well as flag suspicious activities—such as a significantly higher percentage

of complimentary and voided checks or coupons applied to cash checks, etc. This data can

help management identify questionable situations and take timely and proper action.

Monitoring fraud levels and using analytics to determine how and where fraud is

occurring allows you to make changes to your processes and tools to prevent additional fraud,

(American Bankers, 2018). With the growing internet diffusion and broadband availability

hotels have expanded their offerings to meet the demands of a digital and mobile world; there

has been an increase in card-not-present fraud, (Carlino, 2018). Fraudsters will always use the

path of least resistance, and with card-present fraud being more easily detected, fraud has

shifted to the online space. And this makes it difficult for hotel managers to contend with.

Hotel managers are in a difficult position when it comes to preventing fraud; they are

then forced to deal with the increased fraud and reputational risk when their best customers’

loyalty accounts are taken over by a fraudster. As this attack scheme continues to grow, hotels

must implement solutions to ensure their customers are protected. With the rapid increase of

different ways to check in/out hotels are implementing new and effective ways to protect

their clients information from fraudulent persons. Hotels should upgrade to EMV-enabled,

point-of sale terminals to reduce risk of card present charge backs. Partner with solution

providers that can offer enhanced online fraud detection with little-to-no customer impact or

friction; utilize device intelligence, site navigation metrics and IP geolocation tools that

provide valuable insights on the risk of a transaction; incorporate machine learning/big data

insights from a community of hotels. To provide a more nuanced view of the risk of a

transaction; create work flows to dynamically route higher risk transactions for additional

scrutiny, such as requiring front desk check-in; ensure that your hotel’s loyalty accounts are
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subject to the same fraud screening measures as other online transactions; and understand

typical and out of pattern behaviours for a customer and layer in this customer insight to

refine your risk score.

Hotel data breaches have become epidemic since the fall of 2015, prominent hotel

names such as Hyatt, Hilton, Trump, Starwood Hotels & Resorts and Omni Hotels & Resorts

have announced data breaches affecting hundreds of properties around the world. In July

2016, Kimpton Hotels announced its investigation of a possible data breach. Hotels became

the latest when it announced Aug. 12 that travellers visiting at least 20 hotels, including

Marriotts and Westins, may have had their credit card information swiped. Cardholder names,

card numbers, card expiration dates and security codes were thought to have been stolen.

Hackers “go where there’s minimum effort and maximum reward,” says Brian Hussey, global

director of incident response & readiness at Trust wave, an information security company.

“Attackers get pretty good at finding holes.” If they find a weakness in one industry, they’ll

focus attention there. Thieves see hotels as a weak spot. The 2016 Trust wave Global Security

Report, which examined hundreds of data breaches across 17 countries in 2015, found the

hospitality industry accounted for 14 percent of the breaches. The industry had the second-

highest number of breaches, up from third place a year earlier. The retail industry continues to

suffer the most breaches. While many hotel chains have been silent about breach details,

Omni revealed credit card and debit card information for more than 50,000 customers had

been swiped, and Hyatt said about 250 of its locations around the world had been hit. Several

hotel chains said crooks targeted point-of-sale systems in restaurants, bars and gift shops.

Trust wave found two-thirds of the hospitality industry attacks were at these payment

terminals. Thieves look for the equivalent of a master key to data accounts, says Gary Davis,

chief consumer security evangelist at Intel Security (Ladika, 2016).

Shantel Burgher
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1600106
What are the fraud prevention training that are in place?
According to the Business Doctor (2018) fraud training can be defined as a training an

employee undergoes that is factored around the code of conduct, the risk of fraud, the

employees' role in preventing fraud, and the company's strong commitment to being a good

corporate citizen. It is broken up into four main parts allowing for effective awareness and

detailed information. These include: Giving a simple definition of fraud: fraud is lying,

cheating, and stealing, discussing how fraud negatively impacts a company's bottom line and

reputation, giving examples of various fraud schemes employees might discover, such as an

offer for kickbacks or the illegal use of customers' credit card numbers by other employee

and lastly telling employees what they are supposed to do if they suspect fraud. Reed (2014)

article based on a numerous by the Association of Certified Fraud Examiners, Inc, stated

that according to the 2014 Report to the Nation on Occupational Fraud and Abuse research

shows that the typical organization loses 5% of its annual revenue each year due to employee

fraud. Prevention and detection are crucial to reducing this loss. Every organization should

have a plan in place as preventing fraud is much easier than recovering your losses after a

fraud has been committed.

Barrier (2001) article interviewed different managers and auditors of top hotels in the Las

Vegas areas to find out the different types of fraud accouring and the preventative measures

on how to prevent them, they discussed that too often they do not educate employees on why

they are doing these things because of high turnover and segregation. However they need to

understand the purpose of identifying exceptions, and know what to do when they identify

them it showed how other managers of different hotels explained that the customers are who

really show identify the errors and by bring it to their knowledge actions can therefore take
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place word spoken by Ron Reigle, director of corporate compliance for Peppermill Casinos

Inc.

Gino 2018 was a magazine article on observing staff members within an organization

behaviour to explain the sector typically has high staff turnover and cash takings, the risk of

fraud is increased. It’s reported that losses in the hospitality sector can be as high as 8% of

turnover.

Wasserman (2010) article’s highlight was on small business surveys by 3,000 exexcutives of

businesses that could relate to small hotels catering bed and breakfast and inn where it

showed how fraud affected 54 countries and further showed how they scope out employees

in preventing fraud by countrolling employee tipping, doing surprise and inteanal audits.

Baker (2016) estimated at between 3% and 8% of turnover; in addition, reputations are at

stake within the hotel sector daily, it stated that Increasingly, attacks are being made to disrupt

and gain hacking ‘bragging rights’, therefore the focus has to be on not just financial data, but

all angles. One area under increasing attack is loyalty schemes: 92% of UK adults belong to

one or more loyalty schemes (worth around £5.7bn) and it is easy to convert these into cash

yet, all too often, these are overlooked from a security point of view. To control this

segregation of duties, supporting documentation, proper authorisation, physical control over

assets, reconciliations, analysing variances, outliers, anomalies, inventories/ stock checks,

data-matching, audits, whistle blowing and complaints.

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Chapter 3: Research Methodology and Procedures

Introduction

Shantel Burgher 1600106

The hospitality industry faces problems daily, one of these problems that has taken the

industry by storm and has become a major concern recently is fraud and what the industry is

doing to mitigate this problem and protect the customers of the hotel. This research shows the

different actions and steps that the hotels use to control such problems. This is a qualitative

research that uses case studies and content analysis with samples from the population and

their nature to answer the following sub- topics: What are the fraud prevention training in

place, what are the fraud prevention sanctions in place and what are the fraud prevention

monitoring practices.

Research Approach and Design

Shantel Burgher 1600106

This study is a qualitative research project that uses words to measure and analyze the data.

It uses narrative and direct quotes from the source in relaying information on what are the

polices in place to achieve fraud prevention for hotels in the Montego Bay area. The

qualitative method allows methods allow for in-depth and further probing and questioning of

respondents based on their responses, where the interviewer/researcher also tries to

understand their motivation and feelings (Bhat 2018). This is a systematic method that

answers questions on not only “what” people think but also “why” they think so. For

example, consider a convenience store looking to improve its patronage. A systematic

observation concludes that the number of men visiting this store are more. One good method

to determine why women were not visiting the store is to conduct an in-depth interview of
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potential customers in the category (Bhat 2018). The qualitative research methods are case

studies, interviews, focus groups, keeping records and observing. In the research we use case

studies and content analysis of the hotels data to understand the implementations and actions

that place in protecting against fraud.

Population and Sampling

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This is a qualitative research so it does not have a representative sample because this research

seeks to observe the hotels and tourists for the nature of the research.

Instrument Design

Susan Elliott 1207712

Based on the type of research being undertaken the type of research method we will be using

will be qualitative and as such, we will be conducting a case study for our proposal. In order

for us to gather the most useful information we will be making trips to the selected hotels in

Montego Bay where we will be gathering information through obtrusive observations and

carrying out interviews from different personnel to gain a better understanding of the topic.

Interviews are used to gather information from individuals on a 1 on 1 basic to get a feel of

their responses and reaction, using a series of predetermined questions or a set of interest

areas. Interviews are often recorded and transcribed. The questions will be distributed at least

10 days preceding the interview to give the interviewees sufficient time to condition their

minds for the interview. Interview questions will be structured following a tightly written

script that mimics a survey. A structured interview is one in which a particular set of

predetermined questions are prepared by the interviewer in advance. Data collected are easy

to compile and analyze.

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Data collection procedure

Shanice Green 1601833

the method that will be use to collect the data is qualitative

With respect to qualitative studies it would reside mostly with interviewing subjects and or observing

behaviours or processes as the case may be. You should provide information about the nature of

your site visits, the duration of the data collection of the completed instruments or the documents

that were reviewed

Treatment of Data

Susan Elliott 1207712

Analyzing any qualitative data should be an ongoing process throughout the time of

collecting the data, as well as after the collection of data. Qualitative data analysis consists of

three procedures including data reduction, data display and conclusion drawing/verification
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(Miles and Huberman, 1994). Data reduction takes place through the process of coding.

Coding involves assigning units of meaning to data chunks, and can be open, axial or

selective. These codes can then be displayed or organized to allow the drawing of

conclusions.

Data reduction refers to the process whereby the mass of qualitative data you may

obtain is reduced and organized, for example coding, writing summaries and discarding

irrelevant data. At this stage, please disregard all irrelevant and unnecessary information that

do not deem important to the research, but do ensure that you have access to it later if

required, as unexpected findings may need you to re-examine some data previously

considered unnecessary. Data that has been displayed is used to draw conclusions from the

mass of data, Miles and Huberman suggest that a good display of data, in the form of tables,

charts, networks and other graphical formats is essential. The conclusion drawing/verification

begins where analysis allows you to draw conclusions regarding your study. Feedback from

participants regarding emerging themes; tentative propositions and conclusions will be sought

at the end of the entire collection and data analysis process.

Ethical Issues

Shanice Green 1601833

Ethics are broadly the set of rules, written and unwritten, that governs our expectations of our

own and others’ behaviour. It is crucial that the researchers must conduct themselves ethically

towards the research participants and society in general.

 Confidentiality - confidentiality plays a vital role in this research and we ought to

ensure that the responses gained from the respondents are kept private and only in the
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eyes of the researchers, well secured and protected. We do so by keeping the data on a

flash drive or memory card in an encrypted form.

 Objectivity - we aim to avoid bias in any aspect of the research, including design, data

analysis, interpretation, and review. Also we will ensure that no groups are

inadvertently excluded from the research and disclose any personal or financial

interests that may affect the research.

 Human Subjects Protection – this research involves people, we will make sure to

reduce any possible harm to the minimum, and maximize the benefits both to

participants and other people.

 No negative consequence for refusal to participate- it is strictly the respondent’s

choice whether he or she chooses to participate in the survey. It is their decision to

freely do it or don’t. However, there is no consequence that the persons will face if

they choose not to participate in the survey because it is their choice and we fairly

respect their opinions.

Research Budget

Susan Elliott 1207712

With any major project to be carried out a budget needs to be established in order for the

project to be executed properly. The cost associated with the proposal for this semester can be

seen below.

Activities Done Total Cost

Printing of proposal 50@10=$500

Binding of Proposal 1@100=$100

Total cost=$600
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Research Timeline

Susan Elliott 1207712

Based on discussions with my group members it was deemed important for the execution of

this research be carried out as soon as possible. To ensure that the project was done

successfully certain duties were needed to be carried out. This information was displayed by

using a chart.

DURATION
START END TEAM
TASK NAME (WORK
DATE DATE MEMBER
DAYS)

Determine which week Susan, Shan

research problem to use week 6 14 8 weeks and Shanice

Distribute each members week

section week 7 14 8 weeks
Group meetings via week
Whatsapp week 7 14
Complete literature week week
review 13 14 8 weeks
Finish up final section week week
(chapter 3) 13 14 8 weeks

The chart above gives an indication of the task we carried to complete the proposal.