Our friends at iATS Payments have made us aware of a credit card scam that targets non-profits, and we wanted you to know about it.
What is the scam?
This scam involves a request from a fraudster posing as a donor to refund all or a portion of a credit card donation to a completely different card than what 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 to a non-profit organization using a stolen credit card, often for a large amount such as $3,300 or $2,500.
The fraudster (posing as a donor) reaches out to the non-profit by phone or email with an emotional story, requesting that all or part of the original donation be refunded to a different credit card.
The non-profit organization agrees to issue the refund, consenting to the fraudster’s request for the refund to be allocated to a different credit card or issued by cheque.
The non-profit organization receives a chargeback (i.e. has to return the funds that were donated to it) for the original transaction because it was made using a stolen credit card. The fraudster succeeds in illegally acquiring funds from the non-profit organization.
Read more about this scam here.
How can it be prevented?
Refunds should only be made to the original method of payment and should never be processed to a different card than the original transaction. Also, refunds should never be paid by cheque for a credit card transaction.
Non-profit staff should be highly aware and proceed with caution if they come across any scenario where a suspicious refund request is made.
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