Disappearing money scam

Hefty credit card balances plague many consumers. Knowing this, scammers have latched on to a new way to gain their victims’ trust: the disappearing money scam.

With Americans averaging more than $6K worth (and rising!) of credit card debt, it's no wonder scammers are taking advantage of this vulnerability. At Fraud.org, we have recently received several complaints from consumers who had their credit card balances paid off by a “new friend” or “business partner” only to see the credit vanish several days later.

To gain their mark’s trust, the scammer will keep using different stolen credit or debit cards to pay off the victim’s bills. Once sufficient trust is built, the scammer asks their victim to buy and mail them items such as high-end electronics and gift cards. Along the way, the scammer “reimburses” their victim for the items. However, once the credit card company discovers the fraudulent activity, the bank will remove the scammer’s deposited funds from the victim’s account, potentially leaving him or her thousands of dollars in debt to the bank.

One complaint we received from a consumer in Oregon (we’ll call him “Pete”) details just how this new scam works.

Pete had previously fallen victim to a scam and was later contacted by his former scammer in an attempt to “make amends” by offering to pay off Pete’s $1,950 credit card balance. After seeing that the scammer actually had paid off his debt, Pete trusted the scammer when he later asked for Pete’s help. Over the next few days, the scammer deposited money into Pete’s account and requested that Pete purchase iTunes gift cards with the money he deposited. Days later, after purchasing over $38,000 in gift cards, Pete’s bank shut down his credit cards. And the money that was deposited into his account? It disappeared, and so did the scammer.

We have seen this trust-building scam used through bogus online romances as well. In these cases, the scammer earns the trust of their victim by giving them money, only to ask for it back later. Likewise, this new tactic has popped up in work-from-home scams where victims are asked by an “employer” to purchase and ship items on the business’s behalf. Regardless of what scam fraudsters utilize with this trust-building tactic, the result is always the same: the consumer loses money.

If you receive a loan disbursement or a gift, only to find out that the money given to you is fake, there are steps you can take to prevent yourself from falling victim to the disappearing money scam.

  1. No legitimate business will ever offer to pay off your credit card balance. They should instead pay you directly through a check or direct deposit.
  2. Real romantic partners will not ask you to purchase items and then ship them back. If you receive a request like this, you are being scammed.
  3. If anyone deposits money into your account as a payment for services, or as a gift, do not wire back or purchase any gift cards to pay that person back. There is no legitimate reason for someone to pay or overpay you and then ask for the money back in another form.
  4. If anyone ever requests that you buy gift cards, or that you to pay them with a gift card, they are scamming you. Legitimate businesses, should always accept payments in cash or credit card.

Spotting a disappearing money scam can be tricky. If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can put fraudsters behind bars.