Check overpayment scams are an unfortunate part of needing to trust someone you don’t know well, usually through the Internet, with paying you for goods or services that later turns out to be fraud. This can cause a lot of frustration along with being the victim of fraudulent activity.
When you are victim of a check overpayment scam, it commonly involves a situation that goes like this: A supposed customer changes his mind at the last minute about how they will pay for the goods or services he has purchased. He’ll ask if they can send a cashier’s check but for a larger amount and then asks the seller to send back the extra payment. While the cashier’s check is fraudulent, it often looks valid and many bank tellers will cash it. Later on, the seller receives notice they are charged for the amount of the check due to it being fraudulent. When this occurs, you, the seller, have now lost out on money — and the goods if they have already been sent.
According to the Federal Trade Commission, there are several ways to avoid check overpayment scams:
- Confirm the personal details of the buyer before completing the transaction and sending the goods or completing the service. This includes taking extra time out of your busy schedule to confirm their name, address, and phone number; all of which should determine whether or not this person is using a real name and address.
- Avoid accepting payments by cashier’s checks or money orders as both of these types of payments can be counterfeited by criminals. It is best to accept only major credit cards, and e-checks which verify the bank’s balance and details before the transaction will go through. Other forms of payment that are more secure and the buyer may be willing to use if they are a legitimate buyer are escrow services and online payment services.
- If you decide to accept cashier’s checks as a payment method, never agree to accept one for more than the purchase price. There is no valid reason why this is necessary on the buyer’s end, and therefore should be avoided at all costs. Ask the buyer to choose another payment option if they are unwilling to write the correct amount on the check.
- Take extra precautions when accepting payments by check, even if it seems valid. By calling the buyer’s banking institution before you attempt to cash it, you will not only avoid being responsible for the full amount of the check, but also avoid charges from the bank if it doesn’t go through. You can also ask for the check to be drawn on a local bank or one with a local branch. Many counterfeited checks are from International banks, so if it drawn up on a local bank, it is easier to get in contact with them to verify the check’s validity.
- Avoid and get rid of any type of mail, e-mail or paperwork sent to you that insists you must “Act now” to get a deal, prize, reward, or gift in which you must first send a payment for processing. This is a big red flag for this type of fraud.
Check overpayment scams and other fraudulent scams involving sending payments such as lottery or gift scams, can seem legitimate in the beginning but turn badly very quickly. In order to protect yourself and financial stability, use common sense when choosing what type of payments to accept, and don’t be afraid to cancel transactions that don’t seem legitimate to you. In issues of potential financial loss, it is better to be safe than sorry. After all, a buyer who is truly interested in your products or services will be more than willing to use the payment methods you accept.