How I nearly got scammed, and what you should know about the third party payout scam

As a long-time internet user, I thought I was pretty good at spotting a scam. But the one I’m about to tell you about caused me to drop my guard, so I want to forewarn you as this type of scam is becoming increasingly common. 

It’s called a Third Party Payout scam and is money laundering. You get a website enquiry and they request a quote. They accept the quote but mistakenly overpay you. They ask you to refund the overpayment to a 3rd party (often someone like a graphic designer). The credit card is ofcourse stolen, so a few days later you find the charge back on your account and you are out of pocket to the amount of the overpayment and any fees you’ve paid. 

Fortunately, my spidey-sense alerted me to something being wrong, so things didn’t get that far, still I’m surprised at how easily I was duped. 

Here’s what happened to me.

Like most businesses, I get potential clients contacting me via my website. Often there’s a short sequence of emails back and forth about their website requirements and usually a phone call or a Zoom to clarify things. I’ll send them a website proposal with a quote. If they accept the quote, they get an invoice for a deposit payment.

Last year during our Covid-19 lock-down I received just such an enquiry. I had their full name, their business name, their Wellington street address, and their requirements for an e-commerce website for their new business, along with other websites they liked. 

The person making the enquiry, mentioned very early on that they were hearing impaired, so they could not discuss the project via the phone or Zoom. 

It was their hearing impairment that caused me to be less guarded and cynical. However, I was still feeling somewhat suspicious, as I could not find anything online about this person, there was no Linked-In profile, no Facebook, and they were not a shareholder or director listed in the New Zealand Companies Office Register. Ok, I thought, some people are just very private online (perhaps even more so if they have a disability), and not everyone creates a limited liability company when they go into business. 

But, a lack of an online profile, is a giant red flag that we should all take into consideration when dealing with prospective clients or customers. I took it into consideration but still continued through my quoting process.

They accepted my website proposal very quickly, too quickly, and the tone of their emails changed dramatically (almost like someone else was writing them). They became very demanding about getting an invoice from me immediately, and insisted they pay by credit card. It was at this point I remembered my proposal software records the IP address of the person signing the proposal, perhaps that would give them away. But no, of course they’d used a New Zealand IP address to access the proposal, probably using a VPN service (virtual private network) to mask their real location.

At this point I was 98% convinced it was a scam. I posted the initial email I received into a professional web developer group, and they not only confirmed they’d be suspicious too, but one person had received an almost identical email. I stopped answering their emails, and obviously never sent them an invoice.

My post in that developer group started a conversation (yes we all talk!) and we soon found out similar emails are being used to dupe other creative professionals and basically anyone selling a product or service. I also found an Irish web developer had received the same email – https://www.writeinsite.ie/avoid-third-party-payment-scams/ 

The general advice is to immediately stop correspondence with the scammer. You can also report the scam to the Department of Internal Affairs or Netsafe.

Here’s some warning signs that an email is actually from a scammer:

  1. They use a Gmail account (or anything that doesn’t use a domain name)
  2. They don’t address you by name (they use Sir or Mam)
  3. The sentence structure and grammar might be a little off (spelling mistakes)
  4. You can’t find anything about them online anywhere
  5. They won’t talk to you
  6. They mention a 3rd party upfront
  7. They have a generous budget for the work
  8. They are on a strict deadline

If you get an email like this, you can copy some of  the text and paste it into a  Google search. You may well find others that have received the same email (this is what I eventually did).

Here are some other resources to help you know when you are being scam

https://www.dia.govt.nz/Spam-About-Scams-and-Phishing

https://www.police.govt.nz/advice/email-and-internet-safety/internet-scams-spam-and-fraud

https://stripe.com/docs/disputes/prevention/fraud-types

https://www.scamwatch.gov.au/types-of-scams/buying-or-selling/overpayment-scams

Here’s the scam email I got – if you get something similar don’t engage:

i have a small clothing business for both male and female which i run, now am trying to expand the business and i want you to build an informational website for it for advertisement and to increase my sales rate..
so i need you to check out this site but i need something more perfect than this if its possible http://www.missrebel.co.uk the site would only be informational, so i need you to give me an estimate .The estimate should include hosting and i want the site to have not more than 5 pages ,since it is informational. I have a private project consultant, he has the text content, images and the logos for the site.
Note:

  1. I want only English language
  2. I don’t have a domain yet but i want the domain name as ELITEXCLUSIVEAPPARELS.COM
  3. You will be updating the site for me.
  4. I will be providing the images,logos and content for the site.
  5. I want the site up and running before ending of next two month.
  6. My budget is $3000 to $6000
Scroll to Top