4.4 Chargeback and Reversal Scams
How payment reversals and chargebacks are exploited in P2P trading and how to protect yourself.
§How Chargebacks Work
A chargeback is when a buyer contacts their bank after making a payment and requests that the transaction be reversed. The buyer typically claims that the transaction was unauthorized, that they did not receive the product or service, or that the amount was incorrect.
In the context of P2P crypto trading, a scammer makes a genuine payment to the seller, receives the crypto from escrow, and then files a chargeback with their bank. If the bank reverses the payment, the seller loses both the crypto and the INR.
§Which Payment Methods Are Most Vulnerable?
UPI transactions are generally the safest because they are designed to be instant and final. Reversals on UPI are rare and require significant evidence of fraud.
Bank transfers through NEFT and RTGS are slightly more susceptible to disputes, though reversals are still uncommon for completed transactions. However, if the payment was made from a compromised account, the bank may freeze or reverse the transaction during investigation.
Credit card payments (where supported) are the most vulnerable to chargebacks, which is why most P2P platforms do not accept them.
On CryptoBazaar, UPI is the recommended payment method due to its finality and speed.
§How to Prevent Chargeback Losses
Verify the sender's name matches the buyer's identity on CryptoBazaar. Third-party payments are the primary vector for chargeback scams because the account holder can legitimately claim the transaction was unauthorized.
Keep records of every trade. Save the CryptoBazaar trade details, chat logs, payment confirmations, and bank statements. These records are essential evidence if a chargeback is initiated.
Prefer UPI for payments as they provide the strongest finality. If a buyer insists on a specific payment method that allows easy reversals, consider declining the trade.
Trade with established users who have a strong track record. New accounts attempting large trades should be treated with caution.
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