Overpayment Scams come in a variety of forms. In these scams, criminals play the part of a buyer and require victims to send excess funds from a payment back to the buyer via a cash transfer though money transfer services. Overpayment Scams are most often executed with the use of counterfeit checks.

If you consider posting something for sale online or through the newspaper you should be aware of the signs of an overpayment scam.

  • Know who you are dealing with. Is the person local and reachable at a domestic phone number?
  • If you are selling something, do not accept a payment for more than the selling price. Don’t be fooled by a convincing story or tempted by the excess funds.
  • If you accept payment by check, allow the check ten or more days to clear the buyer’s account before withdrawing funds.
  • If the buyer asks you to send back excess funds, do not send anything back immediately, no matter how often they contact you or how much they pressure you to send the funds.
  • If you received a check payment via an overnight delivery service, see if you can check the validity of the check with the issuing bank.

Even though your funds may be immediately available when you deposit a check, it does not mean that the check is valid or that the funds have cleared from the issuer’s account. If a check is returned to the financial institution for any reason, the deposit will be reversed from your account. If you withdraw funds before the check has an opportunity to fully clear, you will be responsible for replenishing those funds. If you cannot immediately replenish funds, this could result in non-sufficient funds fees, returned unpaid payments and possible account closure if the account is negative for an extended period of time.

Overpayment scams can also utilize money orders. You may receive several money orders totaling an amount larger than the selling price. Similar to the previous examples, you will be instructed to send excess funds back to the buyer via a money transmitter. If you receive money orders as payment, you should be aware of possible red flag indicators of counterfeit items.

  • Are the money orders just under $1,000 rather than issued for the maximum amount?
  • If they are U.S. Postal Money Orders, are they in sequential order?
  • Are the security features noted on the back of the money order and are the features listed evident on the paper?
  • Does the buyer’s signature appear on the money order, if not, do you know who the signer is?

Some scams may require you to share your banking information to process payments. Never share your personal banking information with anyone. Online and Mobile Banking logins and passwords, and Debit Card numbers and PINs provide direct access to the funds in your accounts. If you share your credentials, you should expect funds to be removed from your account whether through withdrawals or by returned deposited items. In both scenarios, you will be responsible for covering any negative balances.

Overpayment scams can come in a variety of forms: Secret Shopper scams, online sales scams and even job opportunity scams.  As with most things, if it sounds too good to be true, it probably is. So the next time you receive a job offer to rate money transfer services or process check payments from home, it’s likely a scam.