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Credit Card Refund Scam Targeting Nonprofits

Credit Card Refund Scam Targeting Nonprofits

Nonprofits Be Warned!

Credit Card Refund Scam Targeting Online Donations

There is currently a scam targeting nonprofits or any organization or individual processing credit card donations online. The scam involves a request from a donor (who is actually a fraud) requesting a refund for all or a portion of a credit card donation to a different card than what was originally used. If you receive a request similar to this, you should flag it as suspicious and do NOT process the requested refund without further investigation.

 

How does the scam work?

  • An initial donation is made by “stolen” credit card to a nonprofit organization, often for a large amount such as $2,200.
  • The fraudster (posing as a donor) contacts the nonprofit after the donation (usually by phone or email) with an emotional story, requesting that all or part of the original donation be refunded to a different credit card due to an error. i.e. A refund of $2000 may be requested from a total donation of $2,200 – where the fraudster claims they only intended to donate $200 but accidentally pushed an extra “0”.
  • If the nonprofit agrees to issue the refund, and allocates this amount to a different credit card or issued by check…the scam has worked!
  • What happens next is within a day or two, the nonprofit receives a chargeback for the original transaction because it was made using a stolen credit card.
  • There is little recourse for the nonprofit organization in this scenario. The victim (the nonprofit or charitable organization) is out $2000 …or whatever the amount was that they refunded back to the scam-artist.

To Prevent this from Happening to you…
Put a policy in place that only allows for refunds to be made back to the original method of payment. (Never refund money to a different credit card OR send a check)

Visit DoJiggy Merchant Services for more information about our safe & secure credit card processing services.

Kari Kiel

About Kari Kiel

Kari Kiel is the Marketing Director at DoJiggy. Her passions are branding and marketing communications and she holds a MBA in Marketing from the University of Colorado Denver.

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