The phone rings. Mr. Gomez, a 10 year client is on the phone with a problem. It seems like he was overcharged $230 on his last bill and paid it with his credit card. Mr. Gomez would like a refund check sent. The receptionist quickly promises Mr. Gomez a refund and has a check sent.  Weeks later, the law firm's controller discovers the refund was for a payment that was never made to the firm.

What happened? Mr. Gomez wasn't really Mr. Gomez. He's a professional scammer, and calls hundreds of law firm every week using common names and asking for refunds. All he has to do is ask politely for a refund, and law firm staffers, eager to make clients happy fall hook line and sinker for his refund scam.  Refund fraud is simple: scammers call posing as customers requesting a refund and then ask the refund check be sent to an address where they can intercept the check. 

Avoiding to Derek Bogard, Chief Operating Officer of Virtual Payment Systems, a credit card processor that specializes in law firms, "Refund scammers are very good at what they do and count on you being clueless."  According to Bogard, stopping refund fraud requires a change to law firm refund policies and adding a simple rule for employees who handle refunds.  "The refund policy should state that credit card refunds will be credited to the same card that was used to pay.  Scammers don't want credit card refunds because they generally do not have control of the credit card and are counting on you mailing an easy to cash check to them."  Second, Bogard recommends that employees who handle refund requests always have a look at the original invoice and custoemer account before issuing any refund. "Just by being on the lookout for refunds for charges that never happened and being extra cautious if the refund is being sent to an address not on file can stop many scammers in their tracks."