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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID-19. (Image courtesy CDC)
City and County of Wetaskiwin reporting active cases

Both the City of Wetaskiwin and County of Wetaskiwin have active cases.

Alberta chief medical officer of health Dr. Deena Hinshaw updates media on the Covid-19 situation in Edmonton on Friday March 20, 2020. nbsp;Alberta is reporting it's highest daily number of COVID-19 cases, with 364 new infections. THE CANADIAN PRESS/Jason Franson
Alberta confirmed 323 COVID-19 cases Tuesday

Central zone active cases at 145

COVID-19. (Image courtesy CDC)
Maskwacis reporting 37 active cases

Numbers current as of Oct. 19

Health Minister Tyler Shandro and Dr. Deena Hinshaw, the chief medical officer of health, receive flu shot. Photo via Government of Alberta
COVID-19: One more death in central zone

Ponoka County on province’s watchlist

Photo submitted/ Millet In Bloom
Town of Millet declared Best Blooming Community

The Town of Millet is being recognized for their efforts to meet the challenges of 2020.

Conservative member of Parliament Pierre Poilievre speaks during a press conference on Parliament Hill in Ottawa on October 19, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Liberals say Tory effort to set up COVID-19 committee will be a confidence matter

The Tories were originally proposing an ‘anticorruption’ committee

RCMP. (Phil McLachlan - Black Press Media)
British Columbia man dies during ski trip near glacier west of Calgary

Kananaskis Public Safety and Alpine Helicopters responded around 2:30 p.m.

Prime Minister Justin Trudeau arrives on Parliament Hill in Ottawa on Monday, Oct. 19, 2020, following a week-long break for the House of Commons. THE CANADIAN PRESS/Sean Kilpatrick
One crisis after another for Trudeau since last federal election one year ago

It has been a year of unprecedented calamity and crisis

Alberta Premier Jason Kenney arrives for an announcement at a news conference in Calgary, Alta., Tuesday, Sept. 15, 2020.	Kenney is isolating at home after one of his ministers tested positive for COVID-19. THE CANADIAN PRESS/Todd Korol
Alberta premier isolating after minister tests positive for COVID-19

Alberta Premier Jason Kenney is isolating at home

Alberta's provincial flag flies on a flag pole in Ottawa, Monday, July 6, 2020. Advisers are reportedly recommending Alberta's kindergarten to Grade 4 arts and social studies curriculum remove all references to residential schools because it's "too sad" for young children. THE CANADIAN PRESS/Adrian Wyld
Advisers suggest Alberta students not learn about residential schools before Grade 4

Documents suggest children younger than Grade 4 are too emotionally vulnerable to learn about residential schools

robbery
UPDATE: Shooting suspect arrested by Wetaskiwin/Camrose RCMP

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

File photo
RCMP’s response to online discussions about anti-racism demonstrations

Ponoka RCMP Staff Sgt.’s comments misattributed online

Shaelynn Decock and her dog Taco, who has been missing since Aug. 26. Photo Submitted
Sylvan Lake woman looking for closure for her stolen dog

Shaelynn Decock says it has been two months since she last saw her dog Taco

Most Read