This is a question any of us should ask from time to time. You can find a scammer online and suffer from fraud whether as an online business owner or as a customer of another company. eCommerce, Fintech, online dating, and even your email inbox can become a place where an online scammer can try to defraud you.
This article contains instructions from open sources on the course of action to take when you find a scammer online. We also share insights from Covery on how to use our fraud detection software to protect your business from online scammers and fraudulent schemes. This information is based on the Covery team’s expertise as an anti-fraud system, popular in Sweden, the larger EU, and worldwide.
What do you do when you catch a scammer?
Let’s start with describing a situation where you are a customer and you understand that an online scammer has just deceived you.
- Don’t pay any more money. Oftentimes, scammers can say there was a technical error and they will try to correct it if you repeat the payment (or any other hogwash like that.) Alternatively, you can be contacted by another fraudster (or the same one, under an impostor identity) after becoming a victim of another scam, where they will promise to help you recover the lost funds if you pay some upfront charge, retainer, or donation. None of these promises will ever be fulfilled, so don’t pay twice.
- Collect all the information you can to support your future fraud report. While the events are fresh in your memory, collect all the pertinent data to support your claim. Save any email or chat conversations you had with the online scammer, and make screenshots of any interaction and transaction you had with them. Make sure to retain all the details they provided, like their assumed positions, authority, and reasons for payment.
- Safeguard your digital identity. One of the outcomes of online fraud is that scammers create synthetic identities to perform further fraudulent activities. To prevent the use of your compromised PII, contact governmental authorities to request a fraud alert or fraud freeze on your credit score (if you are a USA citizen) and prevent your identity theft. Citizens of the EU and other countries worldwide can work with their corresponding entities to safeguard their digital identities.
- Report the fraud. Once you have secured your digital identity and collected all the data related to the case, you can contact the appropriate authorities with a report that you found a scammer online. In the USA you can contact the Department of Justice, file a police report, or contact the attorney general. State authorities will forward your report to the appropriate department. In other countries, follow your local fraud reporting procedures.
- Attempt a recovery. In many cases, online fraud performed through banks or online platforms can be reverted with a chargeback dispute. However, such disputes only end in your favor if you can provide sufficient proof that you became a fraud victim indeed, and don’t expect to defraud an honest online merchant. Feel free to follow IRS guidelines on the matter. Beware of contacting asset recovery companies, because most of them are frauds themselves, who charge high fees for doing nothing.
- Ensure you will not get baited twice. Analyze the reasons that lead to this situation and make conclusions. Don’t engage in unsolicited phone conversations and delete suspicious emails without opening them. Check any financial offer in the future, consult with trusted financial advisors before taking any action, and follow recommended fraud prevention best practices from official sources in your country. And remember — if something seems too good to be true — it most definitely isn’t.
As you can see, the procedure is pretty straightforward and logical. But what to do if you are an online merchant who found a scammer online?
How to track down someone who scammed you?
An online business needs reliable fraud detection software to secure its revenue. In many cases, customers try to get their money back through fraudulent chargebacks, as described in point 5 above. But there are many other types of online fraud and you need specialized fraud prevention tools to fight them. Covery provides the following features to this end:
- Automated KYC/KYB. The sooner you find a scammer online, the less damage they can do to you. Covery works with a variety of partners, from Ondato, Onfido, and Shufti Pro to Dow Jones to ensure initial and ongoing KYC/KYB user checks against RSA/PEP/sanctions lists, various fraud watchlists, and blacklists. This helps reduce the number of fraud cases by at least 40%.
- Trustchain. Covery maintains a global database of reputation records, which tracks every user within the Covery customer community by 13 unique identifiers. This database is built using Blockchain architecture, so once any Covery customer identifies a user as an online scammer, all the community records are automatically updated. Trustchain contains more than 500 million records as of June 2022 and helped our customers save above 5 billion dollars to date.
- Device fingerprinting. Covery tracks unique software and hardware markers of every device used to access your websites. These digital fingerprints help identify fraudsters on the fly and update Trustchain records in real-time to minimize the risks and potential losses to fraud. Device fingerprints also help prevent account takeovers and a variety of other fraudulent schemes.
- Chargeback management. Covery is integrated with Ethoca and Verifi platforms to enable rapid chargeback dispute resolution and minimize your losses to fraudulent chargebacks.
The question is — are your fraud losses reversible? Let’s answer that.
Will I get my money back after being scammed?
If an individual can provide sufficient proof they were scammed online, their issuer bank will deduct the money from the scammer’s acquirer bank and refund the fraudulent transaction. But if you are a merchant that became a victim of online fraud, your best bet is to prevent such situations from happening in the future. Covery can help, as it provides reliable and powerful fraud prevention tools enabling you to react to fraud in real-time and minimize its damage.
For a more detailed explanation of the value you can get from Covery, contact us to order a free demo, and let us showcase how we can help protect your revenues!