Local businesses should beware the ‘overpay’ scam

Fraudsters pretend to book your business, then rip you off on your credit card

A pretty serious scam continues to circulate throughout North America, and this warning I’m writing doesn’t just apply to Wetaskiwin, Pigeon Lake and Millet, but to anyone on this continent who wants to avoid fraud.

A Pipestone Flyer staff member returned to the office from a day out in the community last Friday with some very alarming news. Several local businesses she spoke to had been attacked by the “overpayment scam” that has circulated around North America since at least 2012.

It’s a relatively sophisticated fraud that is aimed specifically at businesses such as restaurants and hotels (although certain forms of it could be directed at anyone, really). It usually operates like this:

The restaurant or hotel will be contacted by someone through email, or much less likely by phone. This person states they have a large event coming up, possibly a business workshop, a wedding, a funeral or something similar. They’re expecting many guests, upwards of 50, and need to make a reservation or booking and money is no object.

They offer a credit card to cover the deposit and are unable to come into the business in person to pay the deposit for a variety of reasons. Excuses range from “I’m in Europe” to “I’m in the hospital.”

Then a day or so later, the restaurant or hotel is contacted by the fraudster, claiming ‘I’ve changed my mind, I’ve paid you too much, my plans are changing, I’ve cancelled my plans” or any number of other sudden excuses. The fraudster requests a partial or full refund.

What the business owner doesn’t know is that the fraudsters original credit card is either cancelled, stolen or doesn’t even exist, so no deposit was ever made. It can be difficult to discover this as credit card payments take time to process; it may not be possible to get confirmation of the payment within one day.

Although the fraudster’s credit card is phony, the business owner’s isn’t, and the restaurant or hotel is now on tap for who knows how much in missing funds.

My first experience with this fraud was about six years ago at a different newspaper. The RCMP requested I do something in the paper to let local businesses know about this, as a restaurant got taken for about $10,000. I don’t know abut you, but where I come from, that’s a lot of money.

Here is some very good advice from the Canadian Anti-Fraud Center on avoiding the overpayment scam:

Know who you are dealing with; independently confirm your buyer’s name, street address, and telephone number;

Never accept a cheque for more than your selling price;

Never agree to wire back funds to a buyer. A legitimate buyer will not pressure you to do so, and you have limited recourse if there is a problem with a wire transfer;

Resist pressure to “act now.” If the buyer’s offer is good now, it should be good when the cheque clears; if you accept payment by cheque, ask for a cheque drawn on a local bank or a bank with a local branch. You can visit that bank branch to determine if the cheque is legitimate; If the buyer wants to use a service you have not heard of, be sure to check it out to ensure it is reliable. Check its Web site, call its customer service hotline, and read its terms of agreement and privacy policy. If you do not feel comfortable with the service, do not use it.

Stu Salkeld is editor of the Wetaskiwin Pipestone Flyer newspaper and writes a regular column for the paper.

Just Posted

Kenney talks pipelines with Trudeau after election win, calls it cordial

Almost a year ago Kenney dismissed Trudeau as a dilettante and a lightweight

Sylvan Lake Youth Services receives grant for mental health programming

The Alberta Health Services grant will be put towards running the Community Helpers Project

Sylvan Lake’s Leaders of Tomorrow awards get a new look

The Youth Sparks Awards will feature six award categories on May 31

Novice Sylvan Lake Buccaneers sail to home opener win

The novice Buccaneers played in a triple-header with the bantam and midget Buccaneers on April 12

Former Sylvan Lake resident receives humanitarian award

Humanitarian efforts see Sylvan Lake native recognized for long-term contributions

‘Open for business:’ Jason Kenney’s UCP wins majority in Alberta election

The UCP was leading or elected in 63 of 87 seats Tuesday night

Undercover cops don’t need warrant to email, text suspected child lurers: court

High court decision came Thursday in the case of Sean Patrick Mills of Newfoundland

VIDEO: Trump tried to seize control of Mueller probe, report says

Special counsel Robert Mueller’s report revealed to a waiting nation Thursday

Alberta RCMP reminds Albertans how to be ‘egg-stra’ safe this Easter

Put away phone while driving, plan for a designated driver

B.C. awaits Kenney’s ‘turn off taps,’ threat; Quebec rejects Alberta pipelines

B.C. Premier John Horgan said he spoke with Kenney Wednesday and the tone was cordial

Federal government extends deadline to make Trans Mountain decision to June 18

The National Energy Board endorsed an expansion of the Trans Mountain pipeline on Feb. 22

Precautionary evacuation for Red Deer, Alta., residents due to industrial fire

City officials are advising people to close windows and doors and to turn off air intakes into homes

Study links preschool screen time to behavioural and attention problems

The research looked at more than 2,400 families

Could a pharmacist’s consultation help more people get vaccinated?

Canadian study suggests giving pharmacists a monetary incentive to consult would cut influenza cases

Most Read