Every year, consumers lose billions of dollars to online scams — and most never get their money back. Social-media-driven fraud has exploded with TikTok, Instagram and Facebook Marketplace becoming fertile ground for boutique scams, fake sellers, and fraudulent preorders. In 2024 alone, consumers lost nearly $2 billion to social media scams. But the biggest problem isn’t just the scammers. It is the banks.
Under current U.S. banking rules, most consumers have only 60 days to dispute a fraudulent or unauthorized transaction. After that, even if the business is proven to be a scam, even if the owner is arrested, even if dozen of victims come forward — the bank can legally refuse to refund the money. So they do. This outdated policy has exploded into public conversation after several people were scammed out of more than $30,000 by a small-town boutique in South Carolina. Days later, the boutique owner was arrested. But for many victims, it was too late. Their banks refused to help.
A TikTok Expose That Sparked Reckoning
In late 2025, TikToker Katherine Hinzman posted a video detailing how Thomas & Turner Boutique in Belton, South Carolina allegedly scammed her and others out of tens of thousands of dollars. Her video quickly went viral, with over 90,000 views and thousands of comments from people sharing similar experiences.
Hinzman described months-long delays, excuses from the boutique owner, missing or incorrect items, and customers being blocked after asking for refunds. Shortly after the video gained traction, the boutique’s owner, Pamela Brooke Schronce, was arrested on charges of obtaining goods under false pretenses. But the arrest did not fix the financial damage.
Most victims were outside the 60-day dispute window. Their banks refused to refund them — even with an arrest on record. This case is a perfect example of how modern scams operate: slowly, strategically, and with just enough communication to push victims past the deadline.
A Policy Written for 1978, Not 2026
The 60-day dispute window comes from Regulation E a federal rule written in 1978 to protect consumers from unauthorized electronic transfers. It was never designed for online shopping, social-media storefronts, TikTok Shop, influencer-driven sales, boutique preorders, long shipping delays, or small-business fraud.
Scammers today understand this rule better than consumers do. They intentionally delay communication. They send fake tracking numbers. They promise items are on the way. They stall until the 60 days expire. Once the window closes, banks can legally deny the dispute — even if the merchant is later proven to be fraudulent.
This is not consumer protection. It is a loophole. I am getting very tired of finding loopholes…
Why Modern Scams Easily Evade the 60-Day Window
Preorders and custom items take months. Boutiques often sell preorders, seasonal drops, or made-to-order items. Scammers exploit this by stretching out timelines. Victims do not realize it is fraud until others speak out. In the Thomas & Turner case, it took Hinzman’s viral TikTok for victims to realize the pattern.
Scammers use communication to buy time. A scammer does not disappear immediately. They send messages like: “We are behind on shipping,” “Your order is almost ready,” “We are waiting on suppliers.” These messages are designed to push victims past the 60-day mark.
Arrests do not trigger refunds. Even when a business owner is arrested, banks still deny disputes if the window has closed. This is an ethical issue, in my opinion. Banks should be willing to help victims of scams retrieve their funds, especially with proof of a crime being committed. What protection do consumers have here?
This is a systemic failure — not a consumer mistake.
The Human Cost: Real People, Real Losses
Victims of boutique scams often describe losing hundreds or thousands of dollars, being denied refunds by their banks, feeling embarrassed or ashamed, believing they have no recourse, and being targeted again by refund recovery scammers.
Many victims are mothers, teachers, small-town shoppers, grandparents, or people who rusted a local business. And because boutique scams often involve small transactions spread over months, victims may not realize the total financial impact until it is too late.
TikTok Shop & Social Media Commerce Make It Worse
TikTok Shop has become a hotspot for scams, with influencers and consumers reporting counterfeit products, fake sellers, and fraudulent storefronts. The platform’s rapid growth has outpaced consumer protection systems.
Banks are still operating on a 1978 timeline. Scammers are operating on a 2026 timeline. To protect consumers in the era of social media commerce, banking regulations must evolve.
- Extend the dispute window to 180 days. PayPal already uses a 180-day dispute window. Banks can too.
- Create exceptions for proven fraud. If a merchant is arrested or charged, banks should be required to reopen disputes.
- Require banks to investigate patterns. If multiple customers report the same merchant, banks should flag it, not dismiss each case individually.
- Mandate transparency. Most consumers do not even know the 60-day rule exists. Banks should be required to disclose it clearly.
- Protect victims of slow-burn scams. Modern fraud is not instant. Policies must reflect that.
My Closing Thoughts
The Thomas & Turner Boutique case is not an anomaly. It is a warning. Scammers are evolving. Bank policies are not. Consumers are left holding the financial burden while scammers exploit outdated rules. If banks want to claim they protect consumers, they must update their policies to reflect the reality of online commerce — not the world of 1978.
A TikTok creator should not have to expose a scam for victims to be taken seriously, as we have discussed in the past. Equally, a business owner should not have to be arrested before banks acknowledge fraud. And consumers should not lose thousands of dollars because of an arbitrary 60-day deadline. The 60-day rule is failing the people it was meant to protect.
It is time for banks — and regulators — to evolve.
By Beth Gibbons (Queen of Karma)
Beth Gibbons, known publicly as Queen of Karma, is a whistleblower and anti-MLM advocate who shares her personal experiences of being manipulated and financially harmed by multi-level marketing schemes. She writes and speaks candidly about the emotional and psychological toll these so-called “business opportunities” take on vulnerable individuals, especially women. Beth positions herself as a survivor-turned-activist, exposing MLMs as commercial cults and highlighting the cult-like tactics used to recruit, control, and silence members.
She has contributed blogs and participated in video interviews under the name Queen of Karma, often blending personal storytelling with direct confrontation of scammy business models. Her work aligns closely with scam awareness efforts, and she’s part of a growing community of voices pushing back against MLM exploitation, gaslighting, and financial abuse.
Great article, very interesting. Just some detail on how this is handled in my country.
An Electronic Funds Transfer (EFT) cannot be reversed by the bank without the permission of the recipient. EFTs are regulated by the Payments Association. When making an EFT, my bank requires me to tick a box confirming that the recipient is not a scam, especially when making an instant payment. If you have paid out to a fraudster, you will need to report it to the police and open a criminal case. If you are lucky and the funds are still in the recipients bank account, it is sometimes possible to request the receiving bank to freeze the funds, pending the outcome of the criminal case.
When it comes to credit card transactions, chargebacks are rules created to regulate merchants who initiate payments from cards issued by the relevant institutions (Mastercard/VISA/ American Express etc.) to a cardholder. The rules provide how a merchant can process a payment using the card/ card details.
The window for a chargeback depends on the card network and reason for the request:
Standard Transactions: Often 90-120 days from the transaction or expected service date.
Travel/Services: Up to 120 days from the due date of the service (e.g., holiday, concert) if not received.
Extended Periods: Some systems allow claims up to 540 days for exceptional circumstances, but this isn’t guaranteed.
Fraud: Fraudulent charges generally have different (often longer) dispute windows than standard chargebacks
So it is preferable to use a credit card where possible as this provides some consumer protection. I have had fraud committed on my cards a few times already. Once I formally report it, they immediately refund me, and then they take it further.
To your point, I agree that legislation needs to keep up with the times. I think that banks support for change might be based on the level of insurance they can obtain in cases of fraud.
A balance needs to be struck that protects consumers, who are increasingly vulnerable to fraud, as well as protecting financial institutions who are also responsible to various stakeholders (including shareholders, central banks etc.) to exercise prudence.
Just a last thought, I think that the best outcomes can be achieved by a combination of educatiing consumers, and developing technology which can be used in a proactive manner.
Meanwhile we still hold onto hope that all scammers and fraudsters get stopped in their tracks, damn them for complicating our lives like this.