Follow These Tips to Protect Yourself from Overpayment Scams: Scambusters #1,184
expecting. After you deposit the money, the scammer asks you to send some of it back. When the bank finds out the check is fake, your money is lost, and so is the scammer.
Fake Checks and Overpayment Scams
Overpayment scams have become more sophisticated, targeting individuals with fake checks and fraudulent schemes, costing Americans millions annually. Scammers often send checks for more than what's owed and then request the difference back. By the time victims realize the check is fake, they've already lost their own money.
Understanding these tactics is crucial for protection.
What Are Fake Check Overpayment Scams?
Fake check or overpayment scams happen when criminals send victims fake checks for more money than agreed. The scammer then asks the victims to return the extra amount. These checks look real and may clear at first, but banks can take weeks to find out they are fake.
During this time, victims think they have received real payment and send their own money back to the scammer. When the bank finally discovers the fake check, it reverses the deposit. This leaves the victim responsible for the full amount plus any fees.
These scams take advantage of how the banking system works and the victims’ trust in checks. Banks must make funds available quickly, but that doesn’t mean the check is actually valid.
How Scammers Request Money Back
- Wire Transfers – Scammers often ask for wire transfers, saying it’s urgent or convenient. Wire transfers are hard to cancel and they give the scammers quick access to money.
- Money Transfer Services – Services like Western Union and MoneyGram are often used by scammers because they are fast and usually can't be reversed.
- Gift Cards – Scammers are increasingly asking for payment with gift cards. Gift cards can be quickly turned into cash and are very hard to trace.
- Cryptocurrency – Some scammers ask for payment in Bitcoin or other cryptocurrencies. This makes it very hard to get your money back.
- Cashier's Checks – Scammers often ask victims to send cashier's checks as "refunds." Many people think these checks are secure, which is why scammers use them.
The urgency factor is important for their success. Scammers create fake deadlines and emergencies to pressure victims into acting quickly. This prevents victims from thinking critically about the situation.
How Fake Check Overpayment Scammers Find Their Victims
Scammers look for potential victims in multiple ways:
- Online Marketplaces – Legitimate platforms like Craigslist, Facebook Marketplace, and eBay provide easy access to people selling items. Scammers respond to listings with overpayment offers.
- Job Boards – Employment websites are goldmines for scammers targeting job seekers. They pose as employers offering work-from-home opportunities or personal assistant positions.
- Rental Listings – People advertising rooms, apartments, or vacation rentals become targets for fake rental payments.
- Social Media – Scammers scrape social media for personal information, then craft targeted approaches based on users' interests and activities.
- Data Breaches – When personal information is compromised in data breaches, scammers use this data to create convincing overpayment scenarios.
- Cold Calling – Some scammers use purchased phone lists to make unsolicited calls with overpayment offers related to supposed lottery winnings or refunds.
Here is a detailed overpayment scam example:
Sarah lists her used car for sale online for $8,000. Soon, she receives an email from "Michael," who says he is overseas on business and wants to buy the car for his daughter. Michael explains that he will send a check for $10,500 to cover the car and shipping costs. He asks Sarah to deposit the check and wire $2,500 to his "shipping agent" for pickup.
The check arrives quickly by overnight delivery. It looks real, with a legitimate bank logo and routing numbers. Sarah deposits it, and the funds show up in her account the next day. Trusting the situation, she wires $2,500 to the provided account.
Two weeks later, Sarah's bank tells her the check was fake. They reverse the $10,500 deposit, leaving her account overdrawn by $2,500 plus fees. Michael has vanished, and the "shipping agent's" account is closed. Sarah loses $2,500 of her own money, still has her car, and faces extra bank penalties. The convincing look of the check and Michael's calm communication made the scam seem real.
Who Do Scammers Target?
While anyone can become a victim, certain groups face higher risks:
- Elderly Individuals – Older adults might not know as much about modern banking processes, and they may trust documents that look formal more easily.
- Young Adults – College students and recent graduates often do not have experience with large financial transactions. As a result, they may be more vulnerable to scams related to employment.
- Job Seekers – Job seekers should be careful of fake employer overpayment schemes, especially for remote jobs.
- Small Business Owners – Online entrepreneurs often face attempts where customers try to overpay for products or services.
- People in Financial Distress – People who are struggling financially may ignore warning signs when they see what looks like easy money.
- First-Time Sellers – People who are new to online selling may not notice the signs of overpayment scams.
Red Flags of Check Overpayment Scams
Several warning signs indicate a potential overpayment scam:
- The check amount exceeds what's owed, especially by significant amounts.
- The payer asks for the return of excess funds immediately.
- Communication occurs only through email or text, with no phone contact.
- The payer claims to be overseas or unavailable for in-person meetings.
- There is a sense of urgency, with strict deadlines for returning money.
- The check comes from a different person than the one who first contacted you.
- Payment method requests involve wire transfers, gift cards, or money transfer services.
- The payer usually does not ask the typical questions about the purchase or service.
- The bank information on the check does not match the location the payer claims.
- The check looks changed or has different fonts and formatting.
If something doesn’t seem right about the transaction, trust your instincts. Check into it more before you go ahead.
Common Check Overpayment Scam Purchases
Certain types of transactions are often targeted by overpayment scams.
- Vehicle Sales – Cars, boats, motorcycles, and recreational vehicles are common targets because of their high values and active online markets.
- Electronics – Expensive items like computers, cameras, and mobile devices attract scammers due to their resale value and shipping convenience.
- Employment Payments – Beware of fake job offers for personal assistant roles, mystery shopping, or work-from-home positions. These often involve paying you more than expected.
- Rental Properties – If someone asks you to pay more rent than what was asked, it could be a sign of a scam.
- Services – Freelancers, tutors, pet-sitters, and others offering personal services can be targets of fake overpayment scams.
- Event Tickets – Scammers often overcharge people for concert, sports, and theater tickets, especially for popular events.
What to Do If You're Victimized
If you have been a victim of an overpayment scam, act quickly:
- Contact Your Bank – Notify your financial institution immediately about the fraudulent check and any money you've sent. They may be able to stop wire transfers if caught quickly enough.
- File Police Reports – Report the crime to local law enforcement and obtain a report number for your records.
- Document Everything – Save all communications, checks, receipts, and transaction records related to the scam.
- Monitor Accounts – Regularly monitor all bank and credit accounts for unauthorized activity, as scammers may have additional personal information.
- Change Passwords – Update passwords for financial accounts and any platforms where you may have shared information with the scammer.
- Stop Communication – Cease all contact with the scammer, as they may attempt additional schemes once they know you're vulnerable.
- Consider Credit Monitoring – If you have been a victim of an overpayment scam, act quickly.
Several organizations provide assistance to scam victims:
- File complaints and access educational resources for consumers at the Federal Trade Commission. Check out this article: How to Spot, Avoid, and Report Fake Check Scams.
- AARP Fraud Watch Network – Provides resources specifically for older adults, including a helpline and educational materials. And be sure to watch their video, Fake Check Scams.
- Check out this YouTube video, Fake Check Scams Continue to Confuse Consumers.
Conclusion
Knowledge and caution help protect you from overpayment scams. Always check if unexpected payments are real, especially if they are more than what you agreed on. Research buyers or employers before any transactions and never send money back until you are sure the incoming funds are genuine.
Real banks take time to verify checks, and just because you can access funds quickly doesn't mean they are authentic. If you have doubts, wait a few weeks before considering any payment as cleared. Trust your instincts if something seems too good to be true.
By staying informed about these scams and being cautious with financial transactions, you can avoid becoming a victim.
Remember, Stay Alert and Stay Informed!