They say pizza makes everything better, but for Virender Malhi, owner of The Curry Pizza Company in Fresno, it’s hard to enjoy a slice when scammers are eating into his profits. Let’s break down this troubling scam and how you can protect yourself—and your business—from becoming the next victim.
Fraudsters are using apps like Telegram and social platforms like Instagram to promote fake discounts, luring customers into unknowingly participating in credit card fraud. Small businesses like The Curry Pizza Company are left holding the bill, suffering significant financial losses.
How It Works
Scammers list enticing discounts on Instagram, advertising massive savings of up to 70%. Here’s the step-by-step play:
- Fake Offers: Customers are directed to Telegram groups where scammers promise discounts on restaurant orders.
- Payment through Fraudulent Channels: Customers pay the scammers via platforms like CashApp.
- Stolen Credit Cards: The scammers use stolen or fake credit cards to place large orders at the restaurant.
- Chargebacks: When the fraudulent card transactions are discovered, the business faces chargebacks—losing both the money and the food already provided.
Who’s Targeted
This scam hits:
- Small Businesses: Restaurants, pizzerias, and other food establishments operating on tight margins.
- Unwary Customers: Those looking for great deals without suspecting foul play.
Real-Life Example
At The Curry Pizza Company, scammers exploited this method to defraud the business of over $2,000. Regular customers, enticed by fake discounts, unknowingly participated in the fraud. Malhi, trying to understand the process, joined Telegram groups himself and found his business listed without authorization.
“We are very thin on the margins, especially losing this amount of money. That puts us in the negative,” Malhi lamented.
Impact and Risks
Why You Should Care
For businesses, these scams:
- Drain Resources: Financial losses from chargebacks can run into thousands.
- Erode Trust: Customers may lose confidence in businesses linked to fraud, even if unknowingly.
- Raise Operational Costs: Mitigating fraud requires investment in security measures.
For customers, engaging in such offers:
- Compromises Personal Data: Sharing sensitive information with scammers risks identity theft.
- Fosters Fraud: Using these services unintentionally fuels criminal activity.
How to Protect Yourself
For Businesses:
- Upgrade Payment Security: Use fraud detection tools to identify suspicious transactions.
- Monitor Social Media: Regularly search for unauthorized listings of your business.
- Educate Customers: Post clear warnings about legitimate payment methods and discounts.
For Customers:
- Be Skeptical of Discounts: Verify deals directly with the business. If it seems too good to be true, it probably is.
- Avoid Third-Party Payments: Use official websites or apps to place orders.
- Report Fraud: If you suspect a scam, alert the business and law enforcement.
Quick Tips & Updates
- Quick Tip #1: “Did you know? Businesses lose $15 billion annually to chargeback fraud. Stay vigilant to avoid adding to this statistic.”
- Quick Tip #2: Pro Tip: “Always verify payment requests—especially when offered through unofficial channels.”
Stay sharp, stay secure, and remember, a great deal shouldn’t come at the cost of your safety.
Stay safe, stay informed, and don’t forget to verify before you buy!
Key Terms Defined
- Chargebacks: A reversal of credit card charges when fraud or errors are reported, leaving businesses responsible for the loss.
- Telegram: A messaging app often used by scammers for anonymity and group communications.
- CashApp: A digital payment platform used by scammers to receive funds anonymously.
To read more, kindly find source article here