A stranger wants to give me money. What could possibly go wrong?

Credit to Author: Alexey Ferapontov| Date: Tue, 03 Dec 2019 16:24:52 +0000

There are various signs by which to spot an online scam. The strongest one is a request (or even demand) to transfer money to someone under a murky pretext. But what if instead of giving your money away, you get a hefty amount transferred to you? Sounds pretty great. What’s the catch?

The catch is, you’re not getting the money. Here we discuss two types of scam based on incoming money transfers.

“Hey there, I need you to make me a logo”

Ever since starting out as a freelance designer, Andy had a personal website. It didn’t see much activity, but he was reluctant to close it; a personal domain name has its advantages.

The site hadn’t brought in any new clients for a while, but one day Andy received a message:

“Hey there, this is Dave. I’d like to know if you do logo design?”

They exchanged a few e-mails, nothing really detailed. Apparently, Dave had a new business. The website was under construction, and the materials for the logo and brochure were stuck with a “consultant.” Call him Mr. K.

But Dave was so eager to get started, he accepted Andy’s first idea and gave the go-ahead without any questions at all. The only small obstacle was Dave needed to get the materials for the task from that consultant — and Dave owed Mr. K. some money. It wasn’t a huge amount, just over a thousand dollars, and Dave was happy to pay it, but some “technical reasons” were holding up the transfer.

However, Dave said, he could send it to Andy. It would be a great help to get the project moving again. Would that be OK? He would transfer the fee for the job and for the debt to Mr. K., plus a little extra for Andy’s trouble. Andy would then transfer the sum owed to Mr. K. — and all would live happily ever after.

Who could refuse such an offer?

Incoming transfer scam: How it works

As appealing as the deal might look, it’s suspicious. This type of scam has been doing the rounds for at least a couple of years. If Andy had agreed to the proposal, here’s how events would have unfolded:

  • Dave transfers $4,500 to Andy’s account: $3,000 to cover Andy’s fee, $1,400 for the debt to Mr. K., and $100 extra for the “inconvenience.”
  • Andy, an honest man, transfers $1,400 to Mr. K. from his account, as agreed.
  • A few days or weeks later, the card used to make the original transfer is flagged stolen. The bank reverses the transaction, and Andy loses everything — both his fee and the extra payment. But the transfer to Mr. K. cannot be canceled. Ironically, that operation was legal.

In a nutshell: The incoming transfer is canceled after a while, and that money gets wiped from your account. But what you transferred is very difficult, if not impossible, to get back.

Scam involving an “erroneous” incoming transfer

Designers and other freelancers are generally savvy (or get that way quickly). A suspicious manner or unusual request on the part of a potential client will quickly lead them to subreddits or blogs where such cases are discussed.

However, judging by the comments, you’ll see that people continue to take the bait and lose money. That explains why scammers still persist with the swindle.

Another scheme involving incoming transfers is intended for a wider audience. Someone transfers money, typically a very small amount, to your account. A call or text follows from an anxious-sounding person who says they transferred the money by mistake and asks you to return it.

You already know the ending. If you send money to the scammers, a short while later the initial transfer vanishes in a puff of smoke.

What to do if you’ve already received a transfer

The simplest and most effective answer in the majority of cases is: Do nothing at all. This is the rare case when inaction is better than action. Block suspicious “clients,” tell the senders of erroneous transfers to contact their bank. And ideally, call to your bank and explain the situation.

Don’t spend the unexpected money, either — the sender might try to get it through the bank or through a court.

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