2016-01-11 - FRAUD ALERT: Refund To A Different Credit Card Scam
FRAUD ALERT: There is currently a scam targeting nonprofits requesting that all or a portion of a credit card donation be refunded to a completely different card than was originally used. These scenarios should be treated as highly suspicious and should be handled with caution.
How does it work?
- A donation is made by credit card using a stolen credit card, often for a large amount such as $3,300 or $2,500.
- The fraudster poses as the donor and reaches out to the nonprofit by phone or email with an emotional request that all or part of the original donation be refunded to a different credit card. For example, the fraudster may request a refund of $3,000 on the original donation amount of $3,300, claiming that they made an error and only intended to donate $300.
- Consenting to the fraudster's request, the nonprofit agrees to issue the refund to a different credit card or by mailing a cheque.
- The nonprofit receives a chargeback for the original donation because it was made using a stolen credit card. The fraudster succeeds in illegally acquiring $3,000 from the nonprofit. There is little recourse for the nonprofit in this scenario.
What can I do to prevent this?
- Only process a refund to the original method of payment, such as the credit card used for the initial donation. NOTE: Refunding a transaction to an alternate card is not possible within GiftTool, as the refund can only be made to the credit card the transaction originated from.
- Never issue a refund to a different credit card.
- Never issue a refund by cheque for a credit card transaction.
- If you believe that this refund request is a scam, it is recommended that you refund the entire amount of the transaction to the original card to avoid a chargeback at a later time.
- Nonprofit staff should be highly aware and proceed with caution if they come across any scenario where a suspicious refund request is made.
Please feel free to contact us with any questions. You can reach us at firstname.lastname@example.org or 1.877.665.8665 (select option 2 for Support).
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