How One Client's Gut Reaction Helped Stop a Scammer & Saved Her Thousands of Dollars in Fraud!

Last week I received an interesting phone call from a client. She called to tell me she had received a business lead that was a little unusual from the typical leads she receives and wanted my opinion on how to handle it. Below is her story.

Her new customer was involved in a transaction with another business but also wanted to use my client’s services. The new customer wanted to pay my client by credit card for more than the cost of her services, and then have my client pay another business (that the customer owed) with the overpaid money. The whole reason for this request was because the other business was not setup to process credit card payments. After contacting me and discussing this with me I explained that we would not be involved in this transaction and that if this new customer wanted her services they could pay by credit card for her services only. Further, after she spoke to a few others in her circle, she found out it had happened to all of them after which we ultimately concluded this was a scam. Although this deal was worth over $2k to my client, the financial fallout and time that would have been wasted could have been much worse if she had gone through with it.

Let’s break down what happened.

Warning Signs

First, the request to my client was from a new customer she had never met or done business with before. New customer relationships are typically very delicate and new customers usually start small and grow their purchases over time. Rarely do new customers show up and purchase the highest level of goods or services available from day one. In this case, where my client typically earns $400 for a certain service, this new customer wanted to buy $2,400 worth of services right away. I’m not advising business owners to turn away lucrative business offers but there is usually a bit more selling that goes on before someone is willing to pull the trigger on a transaction like that.

Second, the issue of overcharging a credit card and asking for “cash back” is a huge red flag. As a small business owner, if you charge a customer by credit card and that amount is disputed you may find yourself having to issue a partial or full refund. The credit card company doesn’t care if you entered into a deal to overcharge and write a check for the difference. So let’s say my client did go through with this transaction and gave $500 back to the customer, she could have potentially been out of pocket $2,400 in services, plus $500 cash to the customer. At most she might have been able to keep the $2,400 but the $500 cash to the customer would have been lost forever. With identity theft on the rise it could have been extremely challenging to track the person(s) involved in the scam to recover monetary damages, not to mention the time it would have taken to resolve the matter.

Third, in this particular transaction, the customer reached out via text message and would not speak directly with my client. As artificial intelligence advances, the world of robotic responses and automated interactions will continue to grow. This could have been a more sophisticated scam where a robot was able to accurately respond to my client since it was all via text. If they had to speak over the phone the robot may not have been able to handle that interaction as flawlessly and could have spoiled the scam. My client also mentioned that the text messages came fast and aggressively which she found odd since most times she is the one following up with others, not the other way around. A timed sequence robot could have contributed to this apparent aggression which set-off a red flag to my client.

What Should You Do

So what if you find yourself in this situation one day? Not everyone may have someone they can turn to and may have to think on their feet instead. Here are a few tips to keep from being scammed:

#1 Determine the circumstances. Is the transaction outside the ordinary? Is there something in particular that seems odd about your interaction or the transaction itself? If so, trust your gut and consider taking a pass on the opportunity. Even though you may have to give up on potential revenue, consider the time and money you might be saving if it were to backfire on you.

#2 Reverse search the name and phone number of the prospective business lead. One thing my client discovered by doing this was that the name and phone number were both tied to a deceased person. Having this information made us more confident that this was scam. If you find yourself in this situation and sourced similar conflicting information then you would be able to make a sound judgment call too.

#3 Ask business peers. All of us know someone who does something similar to what we do so “phone-a-friend” in these situations and see if they have ever encountered something similar. If you truly have no one you can contact then consider contacting your credit card processor to get their opinion. Sometimes just discussing the facts with anyone is helpful to validate the legitimacy of what you’re getting into. Remember, if it is too good to be true, it most likely is.

#4 Stay vigilant. Whatever you do, don’t proceed with a transaction if it doesn’t feel right or isn’t the right fit for you and your goals. Unfortunately there are plenty of bad people out there who will take advantage of others whenever they can. Keep your guard up and stay alert and you’ll be just fine. If something unfortunate does happen to you, work quickly to alert the correct parties to start the resolution process as fast as you can.

This was a scary situation for my client and it acted as a reminder that these things can happen. Fortunately it all ended well this time.

I hope you found this week’s post interesting and. I post about every two weeks on Monday mornings. Follow me on social media to receive updates when new posts come out.