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

Eckville Town Council approves 2020 budget

Council voted to approve the 2020 Operating and Capital Budget as presented on Dec. 9

Sylvan Lake FCSS recipient of Award of Excellence

Sylvan Lake FCSS was given the Award of Excellence by the FCSS Association of Alberta

Sylvan Lake woman charged with fraud over $500,000

Rimbey RCMP launched an investigation in July 2019 with the suspect turning herself in on Aug. 30

PHOTOS: Sylvan Lake gives during annual Charity Check Stop

Sylvan Lake Emergency Services participated in the Charity Check Stop over the weekend

Sylvan Lake Wranglers fall in close game to Coaldale Copperheads

The Wranglers face the Southern Division second place team Sunday night at the NexSource Centre

VIDEO: Merriam-Webster declares ‘they’ its 2019 word of the year

Declared word of year based on a 313-per-cent increase in look-ups on the company’s search site

Alberta premier opens war room to promote ‘truth’ about energy industry

Effort includes a $2.5-million public inquiry into foreign funding of anti-oil advocacy groups

Feds urge Air Canada to fix booking problems as travel season approaches

The airline introduced the new reservation system more than three weeks ago

Almost 14,000 Canadians killed by opioids since 2016: new national study

17,000 people have been hospitalized for opioid-related poisoning

Thunberg ‘a bit surprised’ to be Time ‘Person of the Year’

‘I could never have imagined anything like that happening,’ she said in a phone interview

Toronto Raptors, Don Cherry top the list of Canadians’ Google searches in 2019

‘Champions’ was the theme of the last year, Google said

Day parole revoked for man who strangled wife, buried body in their Calgary home

Parole Board revoked Allan Shyback’s day parole after he had sex with a massage parlour worker

Alberta plans to reduce surgery wait-times by building operating rooms, using private clinics

Health minister says goal is to have 80,000 more surgeries done over the next 3 1/2 years

VIDEO: Calgary man narrowly escapes from avalanche while running at Lake Louise

Bryon Howard caught the entire wild experience on camera

Most Read