Picture of a laptop screen with a stop-sign and the text 'fraud alert'

How the Refund Scam Works and How to Stop Them

Hey everyone, it’s Ryan Henry, Idea Guy for INSPIREsmall.biz and tonight we’re going to talk about something that I recently experienced when working with a client and that’s something called the refund scam.

The refund scam is this process where someone contacts you either by e-mail or by phone informing you that they’re about to charge your account for a large amount of money. Now these emails and messages are posing as legitimate, well-known organizations such as Amazon, Norton Antivirus and other big names, and so these emails contain a phone number as well as links on how to cancel that order.

If you didn’t authorize it, and this brings me to my first tip that I have about how to protect yourself from these scams, and that’s never under any circumstances click a link in those emails or call the phone number from within.

Scam prevention tip #1: Never click links or call numbers in these emails. Always go directly to the official website and look up their customer service number.

Now other things that you can do to protect yourself is when you receive these emails you can always forward them to the attorney general in your local area, including as many details as you can provide about it if you had contacted them.

So just really quickly here, I feel like it’s important to break down and walk you through the process of how these scams work. And before I do, I would like to give credit to a couple of YouTube channels that I subscribe to and keep up with.

The first one is Scammer Payback, the second is Jim Browning. And there’s another YouTube channel I follow called Kiboga. These channels are content where they engage with the scammers to see how the scams work and to some degree, they actually try and fight back against them, so I’d like to give thanks to all of those channels because watching their content has helped give me an understanding of how these scams work, and so, right now I’m sharing that information with all of you.

So let’s say you contacted these phony refund scammers.

First, they’re going to answer the phone, and they’re going to thank you for calling their department, and they’re going to inform you that a charge has already been made or is going to be made very soon, and that if you want to stop it, there’s a refund form that they’re going to give.

Now, this is typically a Google form that they give you through a short link, so it is really difficult to know what the exact address is that they’re going to give you. But if you Scroll down to the very bottom of that form that they start you out on, it’ll say Google forms, and there’s a report abuse button if you have been directed to one of those Google forms at the very bottom, click the report abuse.

Google does not allow anybody to use their products for illegal activity and that is exactly what’s being done with those forms. So first and foremost, click that report abuse so if you did fill out that form.

The next thing that they’re going to have you do is they want to access your computer remotely and so they’re going to you to download and install a number of different remote access apps. The most common ones being either TeamViewer or Anydesk.

Scam prevention tip #2: No legitimate company has any reason or need to remotely access your computer to initiate a refund.

So if you were to download that program and give them access to their computer, they can now see and open all of the files on your computer and even the webcam that’s connected to your system.

So if they have gotten access to your computer, they’re going to open up the Command Prompt if you’re on a Windows computer or the terminal window on Macs, and it’s going to look like a black screen and they’re going to type in something to the effect of refund server and start to type information into that.

This is nothing other than theater to just confuse somebody who doesn’t know what they’re looking at. This black screen is something called command prompt on Microsoft Windows and the stuff that they’re typing in is nothing to do with any kind of financial institution and nothing that they type in there is real.

So what they’re going to do is they walk you through the process. They’re going to say refund amount and they’re going to ask you to type in the number of the refund. Now, the reason why this is important is while you’re typing, the scammer is going to hit additional digits on the keyboard. So let’s say for example, if they’re going to give you a refund of $250, they might put two extra zeros there and all of the sudden they’re refunding you $25,000.

Sometimes, the scammers may ask you to access your bank before they open up this window.

Scam prevention tip #3: Never login to your bank while anybody is remotely connected to your computer. 

The reason why some scammers ask you to open up your bank before they initiate the refund or initiate, they want to see how much money you have access to so they know how many additional digits they’re able to put into that command window and make it look like they’ve given you fraudulently or by mistake.

If you had made it this far into the scam now once they’ve put the additional digits in there, they’re going to freak out and tell you, ‘Oh my God, you have to help me save my job, you have to get this money back to me or I’m going to lose my livelihood and my family is going to starve.’

These scammers are going to play on your sensibilities as a human being of not wanting them to suffer, either because after all, they’ve been helpful to you up to this point.

This is where the scam really starts to get insidious, during this time, some scammers lock the ability for you to use your computer, which means you won’t be able to move your keyboard or mouse or type anything on the screen. And during this time they’re going to open up the code of the web page and make it look like they’ve actually refunded you this money. When they allow you to look at your screen again, they’re going to show you your bank and a large amount that was just deposited in your account.

There have been cases where instead of scammers coding this to look like it, they’ll move money from a savings account to a checking. And it really just depends on the technical ability of the scammer.

So if they’re asking you to refund the money back to them, or to return the money that was refunded to you in error, they’re going to ask you for either gift cards to send them, or they’re going to tell you to withdraw this cash or as much cash as you get out of the bank.

Now, if they are telling you to pull the cash out of the bank to return to them, they’re going to start coaching you on what to tell the bank teller at the window as to why you’re trying to withdraw such a large amount of cash. Banks are trained to try and look for signs of fraud and people just withdrawing large sums of cash is a huge red flag to any bank teller, so they’re going to try and ask questions.

And these scammers, they’re going to coach you and say you should tell them that you’re withdrawing it for family or you’re withdrawing it for another reason or need. Now that’s another key point to bring up.

Scam prevention tip #4: No legitimate company will tell you to lie to a bank teller.

By this point, they’re already have counting on you, panicking that you could either be charged with a crime of theft for keeping this money, or anything like that, so they’re hoping that your judgment is already clouded because no legitimate organization is ever going to tell you to lie to a bank teller.

The only reason they are telling you specifically what to tell the teller is that the banks train each window teller at the bank to look for these circumstances to warn you that you are probably falling victim to a scam.

So, if you were to make it to purchasing the gift cards or getting the money out of your bank, they’re going to in the case of gift cards, ask for the numbers immediately. Now, once you give them those numbers, that money is gone and it’s not recoverable, so it’s important to not make it this far.

If they have instructed you to get cash out of the bank, they are now going to continue to coach you as to how they get that money, most of these scammers are located in India, but they rely on people here in the United States to receive the money so it can then be sent to the scammer overseas.

Scam prevention tip #5: Be cautious of ‘work at home’ opportunities advertised on social media.

The way that these scammers recruit Americans is usually with phony work at home scams where they’re offering big pay for minimal work and don’t like when you ask questions about it. That’s why it’s important to always be leery of the work at home posts that you see on social media, because sometimes, not always, but sometimes they are related to criminal activity.

Once the scammer gives you an address to send the money to, chances are it is either a drop off location such as a FedEx or UPS store or scammers also utilize websites like Airbnb to get an American to that place to receive the package. By the time someone realizes what’s going on, that money is long gone.

Scam prevention tip #6: It is illegal to send cash through the mail.

If they are telling you to send money through the mail, they’re usually going to tell you to wrap it in something because it is a crime to ship cash in the United States, it will get seized and you can get in a lot of trouble for sending money through the mail, so just never under any circumstances do that.

Other things that scammers are starting to do now is utilizing Zelle and wire transfers to get the money and the way that works is that scammers who have already successfully scammed another person may have taken control of that bank account and they either create the Zelle account to go with it or other ways fraudulently access that account to take money out of it.

If you are the person who wires the money or sends it somewhere, make sure you keep that name and all of the details you can because you’ve been scammed and it’s time to contact your local authorities and let them know what’s happened and the more information that you’re able to give the authorities, the better chance they have of catching the money before it leaves the country.

Unfortunately, few people get their money back if they’ve made it this far in the scam. There are sometimes ways that people are able to get their money back. The best thing that you can do is just remember that no legitimate company is going to need access to your computer to initiate a refund, and secondly, no legitimate organization is going to tell you to return overpaid or over refunded funds with gift cards by shipping money through the mail or wiring it back to them.

If you like what we talked about in this video, be sure to like, share and subscribe, because the only reason scammers are able to operate is that there are so many people who fall victim to them every day. So please do your part and share this video with somebody out there. Maybe you can help them avoid being scammed.

Revenge: Sending Scammers A Glitter Bomb

Recent Posts in the Library