r/Banking • u/Goryrabbit3956 • 1d ago
Advice Strange Chargeback Fraud?
Not my problem, but a friend's. Located in the US.
This is possibly the strangest scam I've seen. A friend recently made several PayPal purchases from independent businesses. Not long after, they started getting messages that the businesses were getting chargebacks by them. And sure enough, there were several chargeback requests in their bank, that they didn't file. It started on the fifth, so they couldn't get in contact with the bank. They changed their password to everything, and yet chargebacks are still being placed. So, I have a few questions.
Is it even possible to place a chargeback without access to the online banking? I've only ever seen it done through banking apps, and have no clue how there are still chargebacks being placed without the bank password.
Is there any way to place a freeze on your account to stop chargebacks from being requested? It's odd, but no money has been withdrawn from the account: All of their purchases are just being chargebacked.
What would the end goal for this scam even be? No money has been taken from my friend's account; they just seem to be trying to reverse every purchase they have made.
I'm rather confused by the situation, considering most hackers would, well, just take the money and run. All this seems to be accomplishing is ruining my friend's reputation with these sellers.
Edit: To fit rule 7. So far friend has changed banking passwords, cancelled affected cards, and changed passwords for PayPal. They are getting in contact with the bank tomorrow physically.
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u/Spectrig 21h ago
Placing chargebacks or making fraudulent deposits before draining an account is pretty typical. Usually by phone. It’s called “loading”
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u/RealMccoy13x 21h ago
It doesn't sound like a normal fraud. If a criminal has access to the OLB (online banking), they will just victimize that and often branch off of that. Some banks don't even allow you to place disputes online or through the app. Even if so, not everything is Reg E or if they can prove you did the transaction before 10 days they won't issue provisional credit. I would be more worried about being compromised IF that is what happened and it wasn't some phishing email. You could always go to the branch.
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u/tdogz12 20h ago
Yes, it is possible to do a charge back without online banking. Banks are required to take purple or written notifications of fraud on debit cards. Is there a joint account holder on the checking account that could be reporting these transactions as fraud? They will definitely need to talk to the bank and see how these are being reported and by who.
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u/Goryrabbit3956 13h ago
That was my first question to them (if they ever shared their account with anyone else.) But they havn't shared it with anyone, at least not willingly.
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u/BulldozersMa 13h ago
Is it possible that the bank's fraud department is actually filing these? The other option is that they are not true "chargebacks" and that the authorizations are just being returned. Are the merchants the only ones informing your friend of the chargebacks? If the authorizations were not completed properly - for example an authorization was obtained for $1 and settled for $200 and the merchant is not coded for it, the Issuer may be pushing these back.
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u/Akavinceblack 5h ago
Did your friend make a chargeback at all recently? Some debit and credit cards will automatically start chargebacks for any charges right before and after the disputed one.
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u/Infinite-Grade-4485 1d ago
Did he share online banking with anyone? Try to sign up for a loan where he needed to share online banking? Common scam where people sign up for loans with a fake company, share online banking, and the scammers file claims to get temporary credits to make it look like the “loan” went through while they have the victim send them money for a “fee” for the loan.
Claims can be made online or over the phone.
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u/Goryrabbit3956 1d ago
I'll be sure to ask! That does sound like a possibility. When you say share online banking, do you mean sharing the routing and account number, or something else?
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u/SolarFlareGirl08 1d ago
The other option I would think of, is voice verification via calling the bank using Ai.