Overpayment Scams


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Previously, we have discussed how fraudulent checks can be used to carry out multiple frauds. Among the various malpractices revolving around counterfeit checks, overpayment scams are often used to scam sellers and retailers. In this type of check scheme, scammers ‘overpay’ the victim for any good or item and then ask for the refunding of the extra amount of money immediately.

Overpayments scams are more common in the transactions made over the internet where buyers and sellers don’t have to meet to seal the deal.

According to a report from the Federal Trade of Commission, check overpayment is among one of the most reported internet and telemarketing scams. Therefore, it is imperative for internet shoppers to remain on guard to protect themselves from any such fraud.

In this article, we will outline how these scams play out and the measures to prevent them. Specifically, some common pointers of an overpayment scam.

A Generous Offer

Scammers, masquerading as buyers, lure the victims by offering them a good amount of money on the items they have advertised on the internet. The offer is often so good that no real one can match it. Furthermore, to veil their identity, scammers usually make these offers through emails.

Sending Money Through Check or Money Order

Instead of directly wiring the money into seller’s account, they pay the price via check or money orders. Since they are a legitimate banking ways of transferring money, therefore most of the sellers agree to conclude the deal.

The Excuse of Overpayment

This is the most crucial step of this scam. And if scammers pull off this step without any glitch then there are strong chances that the scam would finish successfully by ripping the seller off. The scammers (purchasers) send the victim a check written for more than the price of the good.

They make several different excuses for this overpayment. For instance, they may say that the extra money is intended to cover the shipping costs or to make a payment to the agent looking over the transaction. Or simply, they would say the excess amount of money is transferred by a mistake.

In most cases, lack of understanding is the general excuse used for this overpayment. Once they convince the seller about the reason of overpayment, they ask the surplus money to get immediately transferred to their account electronically.

Unraveling of the Scam

In a day or two, the seller gets informed by his bank about that counterfeit check or money order. In some cases, the checks are authentic but written on the behalf of a compromised bank account.

Consequences of Overpayment Scam

Sellers or victims have to face these unwanted consequences in the wake of an overpayment scam:

  • They lose the overpaid money that they have transferred the scammers from their own pocket. There are nearly no chances of getting that money back.
  • In the meantime, they remain unable to sell the item by they have already stopped taking other offers.

Preventing Overpayment Scams

Be acting on few simple things and keeping in mind some red flags, people can protect themselves from getting conned by an overpayment scam.

Red flags

Overpayment: In these types of scams, overpayment is obviously the biggest red flag. If a buyer is offering you a good deal and paying an excess amount, then you should treat this transaction as too good to be true.

Checks and Money Orders: If a buyer is insisting to pay through check or money order instead of certified check or electronic transfer, then it is a big red flag. It is better to call off the deal in this situation.

There are few steps that you should take when dealing with internet transactions:

  • Always verify the name, address and contact details of the seller via independent sources (Google might come handy in such instances).
  • If you receive excess amount of money through checks and money orders, then immediately return it back instead of acting on the instructions of the buyer.
  • Even when you are dealing with a prospective buyer, don’t stop to get further offers.

In any type of deal which involves money, it is always better to resist the urge to act in the moment or on impulse. With rational thinking and approach, you can protect yourself from overpayment and other related scams.


Posted On January 27, 2018