In our continued efforts to help you spot scammers, we’re reaching out to make you aware of an ACH refund scam. This scam usually involves a bad actor presenting themself as a client who might request a significant level of service from you, and then make a large payment via ACH. This is followed by a refund request, which they typically ask to be paid outside of the QuickBooks platform. The bad actor posing as a client often cites a seemingly legitimate reason for the refund and tries to make it seem urgent. While the off platform refund is processing, they dispute the original ACH payment with their bank claiming they are the victim of a fraud. The result is that you may lose both the original payment and the refund.
To help keep your business safe and avoid potential scammers, watch out for these warning signs:
- Large transactions—Be cautious if someone asks for a refund after services have been requested. Scammers often target bigger transactions.
- Changes after the invoice—A client wants to decrease the work connected to their initial engagement with you or change the payment details after it has been invoiced. This could be an attempt to divert payment to the scammer’s account.
- Partial refunds—Sometimes, scammers will ask for a partial refund, first, to seem more believable, and then they’ll ask for more money later.
- Feeling rushed—Be careful if someone is pressuring you to process a refund quickly. This is a common tactic used by scammers.
If you think a refund request might be a scam, here’s what you should do:
- Don’t process the refund outside of QuickBooks.
- Tell the client to dispute the original payment through their bank or financial institution.
Helpful tips when engaging a new client
When kicking off work with a new client, it’s important to onboard them through your firm’s outlined process to not only protect yourself, but the client as well. Here are a few tips that can also act as a barrier for any potential bad actors posing as potential clients:
- Have a kick-off call, on camera, before you officially engage work and accept a payment. This will help you identify and understand the work to be done.
- Create an engagement letter that outlines the work you both agree to be done. This engagement letter can also include payment terms, including refund timelines, and enable you to get important information from the client.
- Begin work only after the engagement letter is signed by the client.
Several resources are available on the Firm of the Future and Intuit Tax Pro Center blogs.
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