Disappearing Money Scams

Recognize and Defeat Disappearing Money Scams

Has someone new in your life offered to pay off your credit card balance? Have they paid it off already? You may be in the crosshairs of a credit card payment scam known as the "Disappearing Money Scam." 

Unsuspecting victims are being tricked into using their credit cards to make purchases for fraudsters who claim they will repay them. Fraud.org reported on this scam being attempted by individuals gaining the trust of their victims. However, as of 2024, scammers are also masquerading as companies to steal from job seekers.

How Does the Disappearing Money Scam Work?

This scam preys on someone's desire to reduce credit card debt. The scammers will seemingly clear their debt. They will then ask their victim to make purchases with the card, eventually leaving them on the hook for both their original debt and these new purchases.

So, how do you spot these disappearing money scams and protect yourself and others? Well, education can certainly help.

Here's what the scam might look like:

• You receive an offer to pay off some or all of your credit card balance. This might be presented by a new friend, romantic partner (see romance scams), business partner, or even a company that has offered you a new job.
• They may pay off a balance or part of it. This is an investment by the scammer to gain your trust or may be a fraudulent payment as well.
• At some time in the near future, they will ask for a favor. They want you to purchase items for them using your credit card, saying they will reimburse you. These are typically high-end electronics and gift cards. In the case of job scams, these purchases will often be under the guise of supplies you will need for your work. But any time someones asks you to buy or pay them in gift cards, that is a red flag for a scam.
• The scammers use other stolen cards to put money in your account to "reimburse" you for the purchases.
• The other stolen cards' financial institutions will reclaim all the deposited funds, and you are left holding the bag. Your credit company will likely also reject the original payments made to your credit card balance.