Whenever a service pops up that allows people to transfer money on the internet, scammers are quick to follow suit. And as such, there’s been a recent spike in sugar daddy scams that can leave people out of pocket and miserable.
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 an existing system. This involves older, richer people who identify as sugar daddies or mommies. These people want to use their riches to find companionship.
These sugar daddies and mommies will often meet younger people in need of cash, known as sugar babies. The sugar babies give their respective sugar daddy or mommy love and attention, and in return, the sugar parent gives them money, pays for dates, or offers some other financial incentives.
When performed with good intentions, the relationship between the sugar daddy and their baby is productive, and no scams or abuse technically occurs. However, scammers are now leveraging this system and finding ways to extract money from people.
What Is the Sugar Daddy Scam?
The sugar daddy scam comes in a variety of different attack vectors, but they all have the same base process and result.
In the scam, the fake sugar daddy makes the sugar baby believe they have received or will receive a large sum of money. Then the fake sugar daddy asks for some money back. After they’re paid, the fake sugar daddy leaves and takes the money they falsely promised with them, leaving the sugar baby out of pocket.
The scammer will usually take one of two routes to get money from the sugar baby.
The first involves them promising a huge sum of money but asking for an upfront payment first. The second route involves the scammer paying the sugar baby a huge sum of money that evaporates after a period of time, but not before the scammer asks for some back first.
When the Scammer Asks for an Upfront Payment First
The first method is the easier of the two to sniff out. That’s because it uses a common money-related frauds that we’ve seen for years in other services, such as Venmo-related scams.
The scammer begins by posing as a sugar daddy or mommy. They then approach people on websites and social media who are looking to become a sugar baby.
The scammer will send the user a message, telling them that they’re willing to pay off any bills they have or buy them expensive goods. This leads the victim into believing that the scammer has the solution to their problems.
The scammer then declares they’re ready to help the victim get out of the mess they’re in; but there’s a catch.
For some reason, the scammer will require a payment from the sugar baby before they send over the money. The reason can change from scammer to scammer. Some will play the power card and say that the small payment acts as a “proof of loyalty.” Others will use an excuse such as payment fees or other expenditures involved in sending the money over.
Of course, the initial payment isn’t for anything: it’s just a scam. Once the scammer gets the money, they vanish without sending the promised money and leave the victim out of pocket.
When the Scammer Makes a Temporary Payment First
This method is far more dangerous than the one above, as it reliably tricks the user into thinking they actually got paid. The problem is, the money the victim receives disappears after a while, leaving them with nothing again.
Scammers create this “temporary payment” in one of two ways. They may choose to use stolen credit card funds to pay the sugar baby. The money does land in the baby’s account, but once the credit card company realizes that the card was stolen, they’ll take the money back and leave the victim with nothing.
They may also choose to use a check that they know will bounce. The check will show up in a bank account once cashed, but they won’t truly “count” until the funds clear. If they don’t, the money vanishes from the account again.
But if the scammer is paying a victim with this temporary money, how are they making money off of them? The key here is that a scammer has a small window between the payment and the money evaporating where the victim truly believes they’ve been paid. They can exploit this window and ask for some money back before the money disappears.
For instance, a scammer may send a victim $2,000 in checks to cover the victim’s bills. Then, the scammer will say they want a token of appreciation, or that they have a special occasion coming up. They’ll then ask the victim to pay them back a little bit (say, $100), usually in gift cards.
Gift card payments are a huge red flag that you’re in the middle of a scam. Unlike money transfers, gift cards have less of a paper trail and are easier to send. This is why phone scammers always ask for payment via them.
If the sugar baby agrees, they send the money over, thinking that they still have the wealth of money the scammer sent over as backup. Unfortunately, the checks will bounce and the victim is left with $100 fewer than what they started with.
How to Spot a Fake Sugar Daddy Scam
The problem here isn’t the sugar daddies themselves. While rare, there are legitimate people out there that want to spend money on others in exchange for compliments and dates.
Therefore, the problem more rests on weeding out the ones that don’t want to support you at all. These are the people that abuse the system to scam financially-desperate people out of even more of their money.
Watch Out for Loyalty Tests and Fee Requests
If a sugar daddy or mommy asks for you to pay them before they pay you, be on immediate alert. This includes payments to “prove your loyalty” or to cover transaction fees.
If someone is giving you money, it shouldn’t rest on you to send money to them to cover something. As such, it’s highly likely that if someone does ask for a token payment before they pay you, it’s because they want to take that money and run.
Don’t Instantly Trust Any Incoming Funds
If someone does send you money, don’t act on it or spend it right away, especially if it was paid via check. Scammers have a way of giving you temporary funds that can evaporate at a moment’s notice.
As such, when you do receive a large payment from someone online, give it some time to settle first. If they pay by check, give it time to clear before spending it. If they paid money directly into your account, don’t spend it for a while to ensure the cash wasn’t paid via a stolen credit card.
Keep Your Relationships Sweet by Spotting Sugar Daddy Scams
Sugar daddies and mommies, when they’re legitimate, can offer people financial support and a relationship. However, there are scammers keen to abuse the system, so keep your eyes out for these fake parental figures.
Whenever relationships are involved, scammers aren’t too far behind. Even on online dating sites, there are scams galore that can really ruin your desire to find love or companionship.
Image Credit: Yeexin Richelle/Shutterstock.com
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