When you sell items online via sites like Facebook Marketplace and Craigslist, you might be a target of a refund or overpayment scam. In this type of scam, you’ll accept an offer to buy from a supposedly legitimate buyer, who then pays you for more than the amount you charged, sometimes even hundreds of thousands of dollars more. The catch? The scammer wants the money returned.
While refund and overpayment scams vary, the general goal and how they work are all very similar.
A potential buyer offers to pay for your item via check or PayPal. Even if you request payment via cash or through the site’s payment system, the buyer will refuse, giving you any number of reasons why they can’t.
When you receive payment, it’s for more than the agreed-upon price. The buyer usually comes prepared to explain why they sent through the incorrect amount—sometimes they say it's to cover shipping costs, other times they’ll say it’s simply an accident.
The buyer then asks you to wire back the extra funds after depositing the check. They won’t accept a check or PayPal refund—they will be very specific that they want a wire transfer.
Overpayment scams don't work unless you refund the extra money back using an untraceable method. Most scammers will ask for a wire transfer, even if they originally paid you using a different way.
You wire the funds for the difference back to the buyer and send them the item. In the meantime, you’re still waiting for the check or PayPal payment to clear. Since it can take several days for these payments to go through, you won’t realize the payments were fraudulent until it’s too late.
If you receive a check, it will bounce. You’re now responsible for paying back the entire amount of the check to the bank. You’ve also lost the money you wired to the scammer. If the scammer used PayPal, the online payment you received will be denied.
Not only have you lost the money you wired back to the scammer, but you’ve also lost the item you “sold” them. You won’t be able to contact the scammer as they will promptly take off with your money and cease all communications.
When you’re selling items online, it can be exciting to receive an offer from a buyer. However, whether you accept payment via check or online service, it’s essential to make sure these payments are legitimate. Here’s how you can beat this scam:
Overpayment scams are one of the most straightforward scams to identify since you’ll be receiving payment for an item that’s more than your selling price. Here are the main red flags to watch out for:
Overpayment scams can range from low-tech versions in which you receive a counterfeit check to variants that use technology to dupe sellers.
In this example, the scammer references the extra amount he’s sending via PayPal. The high-pressure language is designed to convince the seller to follow this plan and submit the extra money immediately via wiring service.
In the below example, the seller received the check for well over the asking price of $10,000 for his item. The fraudulent cashier’s check was designed to look real, but the seller was able to beat this scam by identifying the overpayment red flag.
Scammers are banking on your trusting nature, hoping you’ll believe that the overpayment was made by an innocent mistake. If you’ve fallen for this scam, you’ll want to take the following steps to attempt to recover your money and item:
Let your bank know that you have been the victim of an overpayment scam and unwittingly accepted a fraudulent payment. Although you may still be responsible for paying back the amount of the bounced check, the bank will likely take steps, such as issuing you a new card, to protect your identity and financial information.
If your transaction occurred via PayPal, your best bet is to contact PayPal and report the fraud. Be sure to forward a copy of the fake payment receipt. PayPal will investigate the complaint and may be able to return the funds.
If the item is yet to be delivered, there’s a chance you and intercept the delivery and have the item returned to you. Contact the shipping company and try to reroute the package.
When selling items online, it’s important to organize shipping yourself. In another scam, fraudsters will offer to provide a shipping label. When their payment for the item doesn’t go through, you’ll be unable to cancel the shipment because it’s not under your name.
Report the scam to the Federal Trade Commission (FTC). The FTC cannot resolve your complaint but can alert the public and prevent further check overpayment scams from occurring.
You should also report the scam to whichever website you sold the item on. Depending on the site, you may also be able to report the scammer’s profile.
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