An introduction to financial scams other than check frauds

We have a separate information thread on check scams, including the fake company agent or representative scams, which you’ll find here. There are also a number of financial scams that we do not cover, although we know people who do, like fraudulent work-at-home schemes, investment frauds, and identity theft.

A quick guide to other financial scams

• Charge back scams – the scammer buys goods from the victim, and pays with a stolen or cloned credit card or with a hijacked Paypal account. There are two ways he can acquire the goods themselves. If the seller ships to addresses other than the cardholder’s address, he will ask for the goods to be delivered to an address he controls. If the seller will only ship to the cardholder’s address, then the scammer will ask for delivery to that address and pay extra for courier delivery. Once the seller supplies the tracking information for the delivery, the scammer calls the courier company pretending to be the seller and asks for the package to be diverted to another address. When the genuine credit card or Paypal account holder realises that their account has been abused, they report it, and the credit card company or Paypal “charge back” the seller’s account, i.e. they deduct the payment and the seller is left with no payment for the goods.
  
• Flashing – this can happen in one of two ways, but basically involves the scammer trying to convince the victim that money has arrived in the victim’s bank account to stay, when really it is only paying a passing visit. The first way is when the scammer tells the victim he is making a direct transfer into the account using cash or a cashier’s check or some other secure payment method. The victim will see the proceeds in a couple of days, but actually the scammer has paid in a fake check, and the bank will eventually realise and debit the account again, leaving the victim out of pocket if he has sent on the proceeds. Essentially, it is like the basic check scam (see here but with the scammer depositing the check instead of the victim. The other method requires the scammer to have access to a hijacked merchant account for credit card usage. These are the kinds of accounts any store or shop has, which enable them to make credits and debits to a credit card account with the card owner’s permission, of course. If a scammer has one, he can make a credit into the victim’s bank account with the merchant account, tell the victim the money is there, and later, when he’s got the goods or cashback he was after, debit the account again.
  
• Fake bank websites – the scammers use fake banks for various reasons. They may be to bolster an advance fee fraud (see here) in which case the scammer will show the victim an account with the huge sum of money lodged. The scammer may also use the fake bank as part of a loan scam, where he offers a cheap and asks for an administration fee, or where he is purchasing goods to show the seller that the funds are available for the seller to claim.

How to protect yourself
Read the information here and see if the circumstances sound familiar. If they do, you can ask for advice here, and we will do our best to show you whether it is a scam or not.

Do not give sensitive information such as your bank or credit card account details, or any identifying information like Social Security or National Insurance Numbers to anyone asking for it by email or phone. If you are not sure who you are dealing with, or are at all unsure about a transaction, ask your local police, your bank or consumer support agency for their advice. If you have given your bank account or credit card details to someone you are unsure of, advise your bank or card provider and ask them to change your account numbers. Stop communicating with the scammer immediately, and do not respond to his attempts to contact you.