Deposit and Refund Scams

How does a deposit and refund scam occur?

 A criminal orders goods or services from a business and makes a payment into the victim’s account, mostly by means of a fraudulent cheque. Proof of payment is then sent to the business and goods are delivered to the criminal. When the bank processes the cheque, it is uncovered that the cheque is fraudulent and as a result no funds are transferred to the victim’s account. The victim is thus out of pocket as they do not have the goods nor the money. In other instances the order is cancelled and an urgent refund is requested. Alternatively a payment is made in “error” and an urgent refund is requested.


How to protect yourself:

  • No “refund” should be made without first verifying with the Bank that the deposit that has been made into your account is indeed valid.
  • In addition, a Bank customer should wait for all cheque deposits to first be cleared before making the goods on sale to a depositor
  • Take great care to protect personal information and that of your company; it is through access to this information that perpetrators gain access to you and your organisation.
  • Staff dealing with finances in your organisation should be educated about such scams.