Beware of credit card refund scam

Alarm bells started ringing for him when the first two credit card numbers the caller gave him were declined, but without proof anything was amiss, he carried on with the transaction and processed a successful payment on a third credit card.

The caller later phoned back requesting to change the model of the product purchased to a cheaper version and said she would now pay for it in-store upon pick-up instead of over the phone as per the first transaction. She then insisted Mr Hill refund her money to a different card.

Bank security will only allow transactions to be reversed to the card used to make the initial purchase, which Mr Hill explained to the caller, who then told him her partner had the card in his possession, so she couldn’t provide the number and tried to convince him to make a bank transfer directly into a bank account instead.

Mr Hill suspected it was a scam and refused, to which the caller declared she was insulted but accepted the response and took no further measures to try to retrieve the money she claimed was hers.

In scams of this nature, the scammer would have received the funds and the bank would have traced the transaction from the initial card — be it stolen, misplaced or a number randomly generated — to the business, which would have had to return the funds to the bank and then be left out of pocket after having already refunded the amount to the scammer.

Mr Hill said scammers were getting sneakier and while there was often a stereotype that they were foreign callers operating from outside Australia where they were somewhat immune to prosecution by local laws, he detected no accent and nothing suspicious about the initial conversation.

He wanted to warn other business owners and retail staff not to fall into persuasive callers’ traps and instead follow the banks’ strict refund policies to protect themselves after hearing from other business owners who had experienced similar situations.