Whenever a service comes to the fore that allows people to transfer money over the Internet, scammers are quick to follow suit. And thus, there has been a recent spike in sugar daddy scams that can leave people out of pocket and unhappy.
So what is the sugar daddy scam, how does it work, and how can you defend yourself?
What is a sugar daddy?
The Sugar Daddy scam takes advantage of the current system. This includes older, wealthy people who identify as sugar daddies or moms. These people want to use their money to find a partner.
These sugar daddies and mums often meet young people who are in need of cash, called sugar babies. Chinese children give love and attention to their respective Chinese father or mother, and in return, Chinese parents give them money, pay for dates, or provide some other financial incentive.
When performed with good intentions, the relationship between sugar daddy and their child is productive, and there is technically no scandal or abuse. However, scammers are now taking advantage of this system and looking for ways to extort money from people.
What is the Sugar Daddy Scam?
Sugar daddy scam comes in a variety of attack vectors, but they all have the same base process and outcome.
In the scam, the fake sugar daddy convinces the sugar kid that they have received or will receive a large sum of money. Then the fake sugar daddy asks for some money back. After the payment is made, the fake Sugar Daddy leaves and takes the falsely promised money with them, leaving the sugar out of the kid’s pocket.
Scammers usually take one of two ways to get money from Sugar Baby.
The first involves promising them a large sum but demanding advance payment first. The second route involves the scammer paying a large sum of money to the sugar kid which evaporates after a period of time, but not before the scammer first asks for something back.
When Scammer Asks for Advance Payment Before Sugar Baby
The first method is the easier to smell of the two. That’s because it uses a common money-related fraud that we’ve seen in other services over the years, such as Venmo-related scams.
Scammers start out as Sugar Daddy or Mamma. They then contact people on websites and social media who want to be sugar babies.
The scammer will send a message to the user informing them that they are ready to pay any of their bills or buy them expensive goods. This leads the victim to believe that the scammer has a solution to their problems.
The scammer then announces that they are ready to help the victim out of the mess they are in; But there’s a catch.
For some reason, the scammer will require payment from Sugar Kid before sending the money. The reason can vary from scammer to scammer. Some will play power cards and say that the small payout serves as “proof of loyalty.” Others will use excuses such as payment fees or other expenses involved in sending money.
Of course, the initial payment isn’t for anything: it’s just a scam. Once the scammers find the money, they disappear without sending the promised money and pocket the victim.
For example, Avast reported an attempt at the PayPal Sugar Daddy scam. The fake sugar daddy told the victim that, before he could pay the more than $1,500, the recipient had to send him money to help verify his PayPal account.
Luckily, the victim knew it was a scam from the start and didn’t send anything, but it’s a good example of how fake sugar daddy and mommy work.
When the scammer makes temporary payments to Sugar Baby
This method is far more dangerous than the one above, as it reliably deceives the user into thinking they have actually been paid. The problem is that the money received by the victim disappears after some time, leaving him with nothing again.
Scammers make this “temporary payment” in one of two ways. They can choose to use the stolen credit card funds to pay the sugar baby. The money comes into the child’s account, but once the credit card company finds that the card has been stolen, they will withdraw the money and leave the victim with nothing.
They can also choose to use a check that they know will bounce. Checks will show up in a bank account once they’re cashed, but they won’t really “count” until the funds are depleted. Failure to do so will result in the money disappearing from the account again.
But if the scammer is paying the victim with this temporary money, how are they earning money from them? The key here is that a scammer has a small window between the payment and the money, where the victim actually believes they have been paid. They can take advantage of this window and ask for some money back before the money disappears.
For example, a scammer may send a victim a check for $2,000 to cover the victim’s bills. Then, the scammer will say that they want a token of appreciation, or that they have a special occasion coming up.