Last week we received a 14 night booking.for January. Unusual length for us, especially in the winter. The name on the booking was unusual. Red flags. They bought travel insurance, though, which seemed odd.
Two days after the booking we received a Stripe Early Fraud Alert, then a day later we were notified of a dispute, reason being the card issuer was notified by the customer that they did not initiate the payment. We accepted the dispute and received a chargeback notice. No problem, we simply cancelled the reservation without processing a refund, sending a notice to the email on the booking and with the message that we were notified by their bank that the transaction was disputed.
We have received two emails since. The first saying there must be some mistake and asking if they could wire transfer the payment (another red flag). The second demanding that we process "a proper refund to the card."
Does this sound familiar to anyone? I can't understand the scam here. It seems that if the cc issuer is aware if the fraud that is game over. I'm also mystified by the travel insurance component. I guess I just don't think like a criminal.
It absolutely sounds like a scam, and the behavior you are seeing matches patterns that pop up from time to time with stolen cards.
Here is what is likely going on:
Why a scammer would still ask for a “refund to the card”
Even though the real cardholder disputed the charge, the scammer is not the cardholder. They don’t have access to the actual bank account. They only had the stolen credit card number long enough to make the original charge.
Once the bank locks the card, the scammer can no longer use it. So why ask for a refund to a card they can’t access? Because that’s not their real goal.
Their goal is to push you into sending the refund by some alternate method they can control.
They’ll usually try one of two tactics:
Claim they want a refund to the card while knowing that you, as the merchant, will reply with “we can’t because the card is closed.”
This is the setup. It lets them shift into…
“Ok then please refund via wire transfer or another method.”
This is where the scam happens.
If a host sends money by wire, Zelle, etc, the scammer wins because the money goes straight to them. You got charged back already, so you lose twice.
You already saw the early warning sign. They suggested a wire transfer. That is the classic next step in this scam.
Why the travel insurance was purchased
This one trips up a lot of people. Fraudsters often add extras like travel insurance, cleaning fees, optional add-ons and so on.
It makes the transaction look more legitimate and lowers the chance of immediate merchant scrutiny.
They know the charge will be reversed anyway. They are not paying for anything with their own money.
Why the scam still continues after the chargeback
Scammers spray these attempts widely, and most hosts shut them down quickly. But some hosts unfortunately send money back via wire, Venmo, etc, because the scammers put a lot of pressure and urgency into their emails.
They only need a small percentage of people to fall for the second step to profit.
What you did was exactly right
You canceled the booking, issued no refund and responded through the email on file. The chargeback reverses the payment automatically, and you should not refund anything manually.
Keep ignoring their later emails. You owe nothing and have already protected yourself.
That's very helpful. Thanks Steven!
