Overpayment scam making rounds on Vancouver Island

In reality, the credit card being used is likely stolen or fake

Better Business Bureau serving Vancouver Island is warning the local business community to be on high alert for an overpayment scam that could result in the loss of thousands of dollars.

BBB has received multiple different reports from local businesses that are being targeted with a sophisticated email scam. It all begins when the business receives an email from a supposed customer requesting the purchase of a specific product or service. Sometimes the email comes directly from the fake customer, other times the email looks as if it has come through a contact form from an online directory webpage. Through an ongoing email dialogue with the business, the scammer requests the ordering of a detailed and very specific product offering provided by the company.

When it comes time for a deposit or partial pre-payment of the product, the “customer” creates some sort of elaborate story or situation in which a third business is involved that cannot accept credit card payment. The local business is asked if they could take a larger lump sum payment from the customer’s credit card. The business is then asked to use the money to pay for the ordered product or service, and to e-transfer the difference to the third-party business.

BBB is warning local businesses not to fall for this classic overpayment scam.

“In reality, the credit card being used is likely stolen or fake, and the money that is being e-transferred will be lost to the business and virtually untraceable once sent,” the BBB says.

Tips to protect your business:

• Ensure all your staff understand how overpayment scams work. Whether the fraudster is using fake cheques or credit cards and requesting wire transfers or electronic transfers, the scam still works the same.

• Never accept an overpayment for a product or service.

• Ensure you have systems in place to make sure fees, deposits and payments have legitimately cleared through your financial institution before purchasing products or providing refunds etc. Speak to your financial institutions about the best practices for protecting your business from overpayment fraud, and fake payments.

• Don’t fall victim to sad or dramatic stories, with high pressure circumstances, under which you must act urgently. Scam artists are great at pulling on your heart strings to try to rip you off.

• Report all incidents of fraud to your BBB and local police.

For information on protecting yourself from fraud visit bbb.org/Vancouver-island.

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