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Clearing cycle scams

Don't get tricked

Criminals often use the clearing cycle to try to influence you to refund a payment to them before the original funds have cleared.

The buyer claims a refund because:

In all of the above examples, the buyer generally makes the original payment by cheque, which is paid in to your bank account. You should never refund a buyer unless you are certain how the payment was made and the funds have definitely 'cleared', which can take up to 7 working days.

If your company receives payment in relation to a known sale or unknown sale (i.e. payment received - no prior sale agreement), always:

  • Check the origins of the payment - do you know who paid it in? What was paid in? Have the funds definitely cleared?
  • Carry out due diligence checks - is the deal too good to be true, if so, it probably is

How long should we allow for a cheque to clear?

If the bank, building society or other organisation that the cheque was drawn on decides not to honour it, it may take until close of business on the 7th working day for this to be advised. More information on the clearing cycle.

We have been asked to send the money back to a 3rd Party rather than to the original buyer?

The refund should always be made to the same bank account, in the same way as you would refund a card transaction to the same card account

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