Scam Spotlight Series: What is Refund Phishing?

Welcome to the Scam Spotlight Series!

Each month, we shine a light on the latest scams that fraudsters use to trick people into giving up their money or personal information.  In 2023, consumers reported losing over $10 billion to fraud, with a median loss of $500 per incident, according to the Federal Trade Commission. By sharing real-life examples, we aim to uncover the tactics scammers use, helping you recognize and avoid their schemes. Along the way, we’ll also provide practical tips to safeguard yourself and your loved ones. At Rivers Edge Bank, your safety and security are our top priorities—because protecting your hard-earned money starts with staying informed.  To learn more about cyber security best practices, visit our Cyber Security resource page.

What is Refund Phishing?  How to Spot and Avoid This Scam

Refund phishing is a type of scam where fraudsters impersonate a trusted organization—like a bank, retailer, or government agency—to trick victims into believing they’re owed a refund. These scams often involve fake emails, text messages, or phone calls that claim the recipient needs to provide personal or financial information to process the refund. Instead of issuing a refund, the scammers steal sensitive information, such as Social Security numbers (SSNs), bank account details, or credit card information, for identity theft or financial fraud.  According to Experian.com, this scam was on the rise in 2024 and is expected to be heavily used in 2025.

In this blog, we share a real-life example of how one person fell victim to refund phishing and how scammers used their tricks to steal an SSN. Learn how to protect yourself with practical tips to stay one step ahead of fraudsters. Don’t let refund phishing take you by surprise—get informed, stay safe, and protect your hard-earned money.

A Real-Life Story: How Refund Phishing Stole Susan’s SSN

Susan, a 35-year-old teacher, was scrolling through her emails after a busy day at work when she noticed a message from what appeared to be a major online retailer. The email claimed that she had been overcharged for a recent purchase and was entitled to a $100 refund. Excited about the unexpected money, she opened the email.

The message looked convincing—it had the retailer’s logo, professional formatting, and a tone that sounded friendly yet urgent. It instructed her to click a link to confirm her refund details. Without thinking twice, Susan clicked the link and was taken to a webpage that looked identical to the retailer’s official site. The page asked her to verify her identity by entering her full name, Social Security number, and bank account information.

Believing the request was legitimate, Susan complied. She received a message thanking her for confirming her refund and stating that the amount would be credited to her account within 3–5 business days. Relieved, Susan closed the page and moved on with her day.

A week later, Susan received a call from her bank about unusual activity on her account. Multiple credit card applications had been submitted in her name, and someone had attempted to withdraw money from her savings account. That’s when it hit her—the refund email was a scam. By entering her personal information, she had unknowingly handed over her SSN and financial details to fraudsters.

(Please note:  Susan’s story is a fictional example based on real-life scenarios, created to illustrate how refund phishing scams work and to protect the privacy of real individuals.)

How to Protect Yourself from Refund Phishing Scams

• Verify the Source: Always check the sender’s email address or phone number. Fraudsters often use addresses that mimic legitimate organizations.
• Avoid Clicking Links: Instead of clicking links in unsolicited emails or texts, visit the official website directly to check for refunds or updates.
• Be Skeptical of Urgency: Scammers often create a sense of urgency to pressure you into acting without thinking. Take your time to verify claims.
• Safeguard Personal Information: Legitimate organizations rarely ask for sensitive details like your SSN over email or text.  Major retailers should never ask you for more information than you already would have provided when making an original purchase. A full debit card number or your Social Security number are not needed when they will most likely provide the refund to the original form of payment.
• Report Suspicious Messages: If you suspect a phishing attempt, report it to the organization being impersonated and delete the message.

To learn more about refund and recovery scams and how to best protect yourself from becoming a victim, check out this information from the Federal Trade Commission.

Susan’s story is a reminder that staying alert and informed is your best defense against refund phishing scams. Always double-check before sharing your information—it’s better to be safe than sorry!