- How the Craigslist PayPal Overpayment Scam Works
- Red Flags of This Craigslist PayPal Overpayment Scam
- How to Beat This Craigslist PayPal Overpayment Scam
- Have You Fallen For This Craigslist PayPal Overpayment Scam?
- Frequently Asked Questions
Craigslist PayPal overpayment scams are a common way for thieves to steal your money, all the while keeping their own identities safe. Unfortunately, anyone selling any item on Craigslist can be a target of this scam. Usually, it’s the big-ticket items and those that would require expensive shipping costs that are targets of Craigslist PayPal scams—things like automobiles, furniture, and heavy items.
However, this doesn't mean that it's not safe to use Craigslist or PayPal (or a combination of the two), it simply means you should look out for red flags of a scam. The main sign of this scam is someone who pays you more than the agreed-upon amount.
How the Craigslist PayPal Overpayment Scam Works
In this Craigslist PayPal scam, buyers on Craigslist send you more money than you agreed on via PayPal then request the difference back from you. They can scam the money out of you because they will ask you to transfer the overpayment amount (either to themselves or a third-party service), but in fact, they never transferred money into your PayPal account in the first place. Here’s how it works.
You Advertise an Item on Craigslist
While this PayPal overpayment scam can be attempted with many different items for sale on Craigslist, the most common items targeted are larger items that require movers, third-party transportation, or other services that require an additional cost.
These larger items include but are not limited to cars, motorcycles, bicycles, boats, jet skis, paddleboards, surfboards, and furniture.
You Receive Interest from a Prospective Buyer
The buyer usually explains that they are tied up in some way that they cannot talk over the phone. They are only able to text or email.
Example Message From Scammer
My name is Joe Smith. I am in the military and working overseas in Iraq. I can’t talk on the phone, so I can only email. I will buy your motorcycle and send my transportation company to pick up today. I will send you full price PayPal now. I only can send you payment through PayPal.
You Receive PayPal Payment for More Than the Agreed Upon Price
You receive an email notification from PayPal that money has been transferred into your account. In some cases, the email will say the transfer is on hold until the entire transaction has been complete (i.e., you've handed over the item for sale).
Not only is the payment amount for more than the price that you agreed on, but they will also insist on paying via PayPal. Even if you suggest other forms of payment, such as cash, the buyer (i.e., scammer) will only pay with PayPal. If you don’t accept this method of payment, they will longer show interest in your item.
When you message the scammer about the overpayment, they will usually say the extra money is to pay a moving company (or other third-party service required), or they’ll ask you to refund them the extra money via a wire transfer.
You Hand Over the Money
After you’ve received the overpayment, the most common scenario is that the buyer will ask you to send a money order or a wire transfer back to them for the difference.
An alternative scenario includes the buyer telling you to use the extra money to pay the moving company, transportation company, or another service that the scammer is proposing.
Note that the scammer will be quite pushy to make you act quickly and see the transaction through.
You Lose Your Money
Whether you've wired over the overpaid amount or given it to the moving company, transportation company, or another service, you have fallen victim to the Craigslist PayPal overpayment scam.
In this scam, the scammer is actually on the receiving end of the money transfer you’ve made to pay the third-party moving service. Even if you’ve handed over cash to the moving company, the person you handed the money to is also part of the scam.
If you check your actual PayPal account, you will notice there was never any money deposited into your PayPal account. Most of the time, the scammer will create a fake PayPal email notifying you that the funds deposited are on hold until the transaction is complete (i.e., until you’ve sent the item and transferred the overpayment money).
PayPal does not hold funds for personal money transfers like this. If you receive an email like this, always check your PayPal account to ensure the money has gone through.
In other cases, the scammer will cancel the PayPal transaction before any money is actually transferred.
Red Flags of This Craigslist PayPal Overpayment Scam
This scam is widespread on Craigslist, so it’s essential to be aware of red flags when dealing with potential buyers.
- Buyer cannot meet in person or talk on the phone: The first red flag in this scam is the buyer’s immediate inability to talk over the phone, pick the item up in person, and pay for the item in cash. They will usually give you an elaborate story as to why they cannot meet.
- The buyer insists on using PayPal only: Regardless of what payment methods you accept, the buyer will insist on only using PayPal.
- Pushy buyer: The buyer will try to send payment via PayPal as quickly as possible. They will say things like, “I’ll send you payment now, do you have PayPal so I can send you payment, follow PayPal link I send you to see my payment.”
- PayPal email looks suspicious: The PayPal notification email might look real, but look closely at the sender’s email address. If it’s an actual PayPal email, it will come from an @paypal.com email address.
- The payment is significantly more than what you asked for: Whenever you receive more money than what you asked for, you should be suspicious.
There are other apps and sites that you can use to sell your items that offer protection when you complete the payment within the platform, such as OfferUp and Facebook Marketplace.
The first clue that you're being scammed is when a buyer overpays you for an item, then asks for the refund outside of PayPal, usually via wire transfer. If this happens, check your PayPal account and if the transfer is there (and it likely won't be), cancel the pending payment and cancel the Craigslist transaction with the buyer.
If the buyer (i.e., scammer) asks you to transfer the extra money to a third-party service provider like a mover, don't be fooled. The money you transfer to the third party is going right into the scammer's pocket.
Scammers will also send fake PayPal emails to you to trick you into thinking a legit transfer has been made. Before sending any items or money to the buyer or third party, log into your PayPal account to confirm the money has been transferred.
How to Beat This Craigslist PayPal Overpayment Scam
To beat this scam, don’t ever refund the buyer (whether for overpayment or a full refund) other than via PayPal—their original payment method. Once you take transactions off PayPal, you will have no protection for your money, as PayPal will have no record you refunded the other party.
Receiving an overpayment for an item is a huge red flag for this Craigslist PayPal overpayment scam. If you ever receive more than the agreed-upon price for an item (especially if it’s a lot more money), you should decline or refund the PayPal payment and cancel the transaction with the buyer (i.e., the scammer).
If you are selling an item on Craigslist, always try to meet your buyer in person to prevent yourself from this Craigslist PayPal scam. Additionally, only accept cash transactions.
To further prevent falling victim to this scam, follow these tips:
- Don’t assume that every buyer is a genuine buyer.
- Accept only cash payments.
- Only sell to local buyers who can pick the item up in person.
- Immediately cancel any overpayment transactions.
- If accepting payment via PayPal, always confirm the transfer has been made before handing over items.
- Don’t ever refund money transferred to you via PayPal other than via PayPal.
The safest thing to do when selling your items is to use an app like OfferUp and utilize their in-app payment system. Keeping payments within the app itself will offer you protection from scammers.
Have You Fallen For This Craigslist PayPal Overpayment Scam?
If you’ve fallen victim to this Craigslist Paypal scam, you will, unfortunately, lose the money you sent to the scammer. Unfortunately, PayPal’s Seller Protection doesn’t protect you from scammers if you willingly hand over your money to them, even though it’s a scam.
The only thing you can do at this point is to report the scam to:
- PayPal by emailing the fraudulent email to [email protected]
- The Federal Trade Commission
- Your local police department
If you sent the item to the buyer (i.e., scammer), you could attempt to reroute the package back to you by contacting the postal service you use. Unfortunately, if you used the fake moving company the scammer suggested, you won’t be able to get your money back.