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Fraud Security

Refund Scams

It is hard to believe Thanksgiving is almost here. Families will get together to celebrate, watch football, and see who passes out first from eating too much turkey. One of the other traditions associated with Thanksgiving is breaking the wishbone. The tradition of wishing on bones is older than you probably think.

This tradition can be traced back to the Etruscans, a group of people that lived in Italy, around 700 B.C.E. The Etruscans believed chicken bones could bring people luck so they would save the chicken’s wishbone. The Etruscans would rub the wishbone while thinking of what they wanted or make a wish. They would then put the wishbone away for another day.

Not only did the Etruscans believe that chicken bones could bring good luck, but they also believed the bones could predict the future. When it comes to fraud prevention predicting what fraudsters will do next is very difficult. We must rely on past patterns to predict what fraudsters will do in the future.

One of the scams that has grown in popularity this year and is expected to increase for the holiday season is a refund scam. Scammers will start by sending an email, text message, or automated call claiming they are attempting to verify a large purchase. The purchase is almost always an online purchase with either Amazon or another vendor like Best Buy. The scammer will claim a large purchase, typically starting around $600.00 and up, of a camera or computer was made in the victim’s name.  

Once someone responds they did not authorize the transaction, the fraudster will advise the intended victim that they are going to process a refund for them. To process the refund, the fraudster claims to need access to the victim’s computer or smart device. The scammer will then instruct the victim to open online banking or mobile banking so the scammer can show the person the refund. The scammer will have the person go to a fake website. The website will give the victim the ability to enter the dollar amount that should be refunded.

While the victim is entering the amount of the refund, the scammer will transfer funds within the victim’s account to make it appear a refund was deposited for more than the original amount of the charge. An example would be the fraudulent charge is for $600.00, however, the fraudster will claim the victim entered $6,000.00. The scammer will then advise the victim to purchase gift cards to return the funds to the merchant. The scammer may even threaten legal action, such as reporting to law enforcement, to scare the victim and push the victim to buy the gift cards or send the funds through a service such as Cash App or Apple Pay.

If the scammer is having the person purchase gift cards, the scammer will try to stay on the phone with the victim for as long as possible. Some scammers have stayed on the phone while the victim was purchasing the gift cards. This helps keep the victim under pressure and prevents the victim from having a minute to slow down and think.

There are other variations of the scam that use cryptocurrency, remote deposit, fake websites, and/or fake online banking images. Fraudsters will even claim that a bad employee at a victim’s financial institution committed the fraud. This is to keep the victim from contacting his or her financial institution.

It is believed that this fraud will increase for the holiday shopping season with the rise in popularity of online shopping. The following are some tips to help protect you from this scam:

  • A merchant does not need access to your computer or mobile device to process a refund.
  • A merchant does not require you to provide your account information to process a refund.
  • A merchant can correct an over payment or incorrect refund without you having to send funds back to the merchant.
  • Never purchase gift cards and provide the numbers of the gift card to someone.
  • When in doubt contact our Member Advocacy and Solutions Team at RadiantCU.org by calling 352-381-5200 or 877-786-7828, or stop by your local branch.

Radiant CU wishes everyone a happy and safe Thanksgiving. Also, best of luck with those wishbones.