Protect yourself

March 21, 2023

By Julia De Simone

Experts say the overpayment scam is one of the oldest tricks in the book, and it’s making renewed appearances from coast to coast.

One popular example of this type of scam is when selling and purchasing items using a check on an e-commerce platform, according to the Federal Trade Commission (FTC). A scammer, posing as a customer, produces a reason for overpaying for the purchase. It’s followed by a request to have the seller then wire back or refund the difference already deposited. Later, the scammer’s counterfeit check (which may look good enough to fool bank tellers) bounces, leaving the consumer liable for the entire amount.

Sara DeSantis of Colorado was preyed upon, but luckily not victimized of an overpayment scam. As reported in June 2022 on KDVR Denver, DeSantis used Facebook Marketplace to sell a bedroom set. The scammer later told her she needed a money transfer business account with a $2,000-minimum payment requirement for the transaction to go through. The scammer would overpay her to upgrade, given she’d refund the extra $500 immediately.

“You could tell they just photoshopped my name. I was like, ‘OK, this is definitely a scam,’” she said, adding that the link to the payment app actually went to a Gmail account.

As stated on the Better Business Bureau website, it’s a big red flag if a buyer or seller tries to persuade you to go outside a site’s usual process or payment methods. Instead, they urge both parties to use the site’s protection offers. However, even if you’re able to cash a check and see funds recorded in your banking account, it might still be fake because it can take several weeks to find out that its bounced.

Experts at the AARP say it’s not really the scammer’s pitch that changes, but its disguise. A specific example is when a person receives notification of winning a foreign lottery or sweepstakes even though playing a foreign lottery is illegal in the U.S. After the scammer sends a partial payment of the winnings, the person is directed to deposit it and wire-transfer a percentage of money back to cover “taxes owed.”

The FTC offers the following tips to avoid check overpayment scams:

  • Know who you’re dealing with. Independently confirm your buyer’s name, street address, and telephone number.
  • Never accept a check for more than your selling price.
  • Never agree to wire back funds to a buyer. A legitimate buyer will not pressure you to do so, and you have limited recourse if there is a problem with a wire transfer.
  • Resist pressure to “act now.” If the buyer’s offer is good now, it should be good when the check clears.
  • If you accept payment by check, ask for a check drawn on a local bank or a bank with a local branch. You can visit that bank branch to determine if the check is legitimate.
  • Consider an alternative method of payment, such as an escrow service or online payment service. If the buyer wants to use a service you have not heard of, make certain it’s reliable—check its website, call its customer service hotline, and read its terms of agreement and privacy policy. If you do not feel comfortable with the service, do not use it.

Bottom line: Don’t fall for the pitch without caution. Do your homework, investigate and follow your instincts.

This content was originally pubished in our award-winning magazine In Your Corner. See Issue 13 here: In Your Corner Magazine | Spring 2023