“Check overpayment” scams target consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck with a big loss when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. The Federal Trade Commission (FTC) has issued a consumer alert, “Check Overpayment Scams: Seller Beware,” that explains this scam and offers consumers tips on how to protect themselves and their pocketbooks.
According to the FTC, a check overpayment scam begins when a scam artist replies to your classified ad or auction posting and offers to send you a check for more than the amount they owe you. They further instruct you to wire a portion of the money back to them, and they may suggest you keep a portion of the overpayment as compensation for sending the wire. BEWARE: The check eventually bounces, and you’re responsible for the full amount, including what you wired to the scammer.
Typical victims include persons selling something over the Internet, replying to a “work from home” job posting, or being sent “advance winnings” in bogus sweepstakes.
Often times the check looks legitimate and may fool even your banker!
How to stay safe
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.
Resist pressure to act now or act quickly
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 such as PayPal
If the buyer wants to use a service you have not heard of, be sure to check it out by visiting their website, calling their customer service department, reviewing their terms of agreement, privacy policy etc.…. If you do not feel comfortable with the service, do not use it.
