About the Phony Credit Card Donor Scams

The CEO and founder of BCG Advisors, Bill Scuorzo is a seasoned insurance professional with expertise in employee benefits and commercial insurance. In his insurance brokerage, Bill Scuorzo is dedicated to providing cyber-insurance designed for nonprofits, which helps them cover first and third-party costs in the event of cyberattacks.

In 2018, attackers used The Harry and Jeanette Weinberg Foundation to ask for donations, while in 2015, the NYC American Museum of Natural History was a victim of a cyberattack through an email phishing scam.

There are several ways attackers can harm nonprofits, and a common one is through the phony credit card donor scam. In this scam, the attacker often uses a stolen credit card number to make a significant donation and then contacts the nonprofit asking for a refund of a smaller amount in another account or different credit card number.

Since they use a plausible excuse, the nonprofit’s finance office refunds the amount requested. The original donation was made with a stolen card, so, a couple of weeks later, the credit card processing company asks the money back, leaving the nonprofit with a significant loss (both when refunding to the phony donor and returning the money to the credit card company).

The nonprofit can prevent this type of fraud in two main ways. First, when someone asks for a refund, it is essential to use the same credit card number used for gifting and never send it via wire transfer. The nonprofit should also always offer to make the refund after the credit card company has processed the transaction.