Common Deposit and Refund scams in SA & How to protect yourself

Technology has created convenient ways for us to take care of our daily banking, without having to leave the house. This is even more useful now when we need to stay home to avoid contracting Covid-19. However, despite the convenience, we need to be mindful of our safety because fraud is on the rise. Criminals are constantly finding new ways to take advantage of unsuspecting victims in order to steal from them. The onus is on us all to learn as much as possible about these tricks so that we can avoid becoming a victim of these scams. Check out our comprehensive guide to deposit and refund scams, and how you can protect yourself.

What are deposit and refund scams?

A deposit scam is when a criminal gains access to your bank account by depositing a fraudulent cheque in your bank account. If you’re a business, it will seem as though they have made a purchase, and you will send them the goods they supposedly paid for. Business owners will realise they have been a victim of fraud only when the money doesn’t clear in their bank accounts. If you’re an individual, the fraudster will request that you send money back to them under the guise that they sent that money to you by mistake. A few days later, you will realise that the money they supposedly sent didn’t clear into your bank account. Instead, you have just given your money to a complete stranger.

Types of deposit and refund scams

There are two common types of deposit and refund fraud that fraudsters use to bait their victims. These can come through fake job listings, fake competition refunds, fake account activity notifications, etc. Common types are:

  1. Fake Purchases and deposits. Business owners might receive bank notifications that a purchase has been made. They will send the products to the criminals, unaware that the money won’t clear in their business accounts.
  2. Overpayment or "mistake" payment notifications. Victims will get a notification that money was mistakenly paid into their account. They will then be requested to refund the money, only to find out that the original payment never cleared.
  3. Job Adverts. Victims are told to deposit/pay a fee before they can be considered for a job they applied for, or even an interview.
  4. Online Loans. Victims are told to pay a certain fee before they are approved for an online loan.

How do you spot deposit and refund scams?

  1. If you get an unknown email address or SMS from someone, requesting that you urgently refund them for a payment they made to you in error.
  2. For businesses, if you’re asked to suddenly refund someone who has "cancelled" an order. They will often request that this be done urgently into their own bank account before the order has even cleared in your bank account.
  3. There’s a sense of urgency from the person making the request.
  4. They don’t have a contactable phone number, or email address, to verify who they are.

How do you protect yourself against being a victim?

If it sounds too good to be true, it probably is a scam and you need to be alert. These are some of the ways you can avoid being a victim and keep yourself protected.

  1. If you don’t know the person, delete the request and don’t communicate any further.
  2. Keep a watchful eye on your bank accounts.
  3. Contact your bank and verify every “deposit” supposedly made before making any refunds.
  4. Never share your personal information. Never feel rushed into making any transaction until you have done all your security checks.
  5. Beware of emails and SMSs that require you to click through a link.
  6. Scrutinise invoices, bank account information, documents, and notifications, to pick up any signs of fraud.
  7. Don’t rely only on a proof of payment shared by an unknown person.
  8. Beneficiaries should be bank-verified.

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