Overpayment Scams

Overpayment scams target people who don’t have money to spare and steal it from them. They often target elderly people. However, anyone can become a victim. Learning about overpayment scams and how to spot the most common ones can help you protect yourself and your loved ones.

What Are Overpayment Scams?

There are many different variations on this type of scam. However, the basics are the same:

  • Someone claims that they’re giving you money.
  • However, they say that they’ve overpaid you and would like you to refund the difference.
  • You send that amount. They take it and run.
  • The original payment never goes through. They’ve stolen your money.

In other words, they claim to overpay you but they really don’t pay you at all; instead, you pay them! It’s a terrible scam, and we don’t what you to become a victim.

Common Overpayment Scams To Look Out For

First of all, beware anytime that someone asks you for money back for an overpayment. That’s your red flag right there. There are very few instances where this would be legitimate. If it is, they can wait until you’ve received your money from them in full and have it in your hands before you issue any kind of refund. That said, here are some of the most common versions of this scam to keep an eye out for:

1. Check Overpayment for Something You’re Selling

For example, you list a used car for sale on Craigslist. The car is priced at $2000. They “accidentally” write you a check for $3000. Then they ask you to just give them the $1000 difference. You hand over the $1000, thinking that you’ve still got the $2000 you asked for. However, when you go to cash that check at the bank, you find out that it’s fraudulent. You’re out the $1000.

This can happen with anything you’re selling. Therefore, never accept a check for more than the amount you’re selling an item for. Honestly, to be safe, you might not want to accept checks at all when selling items to strangers. Ask for cash.

2. Venmo/PayPal Overpayment for Something You’re Selling

This is the same concept as above. However, it happens more when selling products and services online. For example, if you sell something on eBay or through your own website. They overpay you and ask you to send them the money back. Then they cancel the original payment, taking your money. Note that this can happen as an overpayment or simply as a “payment” that they cancel. Make sure that you understand how tools like Venmo and PayPal work and what your options are for such situations before you use them.

3. Wiring Funds Overpayment

This is the same scam, except that in this instance you wire the “overpayment” to the person. So, instead of handing the used car buyer cash, or sending money through PayPal, you use a traditional wire service to send them the money. In all instances, the issue is the same: they pretend to give you money and you really give them money back, losing that money.

4. McDonald’s Monopoly Scams

We mentioned this one specifically because it goes to show that overpayment scams will attempt to get your money for almost anything. In this case, you’re collecting McDonald’s Monopoly pieces, trying to win their prizes. However, someone believes that they can win the big prize with your pieces. They offer to either buy the pieces outright or buy them from you and split the prize. In either instance, they pay or overpay you and you send away your pieces. If you send them back “overpayment” money then you lose the pieces and the money in this scam.

5. Online Refund Scam

In this variation, someone contacts you to let you know that you are owed a refund. They might send you to a website that looks legitimate, but it’s not. For example, it looks like an Amazon account. They trick you into believing that they’re giving you money back for something. However, this scam works like all of the other overpayment scams. They send you your “refund” (that you aren’t actually even owed.) However, they “accidentally” pay you too much and ask for some back. You send it and lose that money. 

Note that sometimes these scams can be very elaborate. For example, they might even redirect you to a web page that makes it look like their payment has gone through to you!

6. Reward Payment Scam

This one is just like the online refund scam in that someone contacts you out of the blue. Sometimes they do so by phone but often it’s through email or social media. They let you know that you’ve won a prize. They pretend to send you the money that you’ve “won.” You guessed it – they send “too much.” When you pay them the difference, they take off with your money. Once again, you’re left with nothing.

7. Taxes or Fees on Reward

In this variation, you’ve supposedly won something. However, they ask you to pay “taxes” or “fees” before they send you what you won. Sometimes they say you won money; other times it’s a prize. In any case, you send the “fees” but never receive the item.

How to Protect Yourself Against Overpayment Scams

Anytime that someone wants to overpay you, refuse to allow that to happen. There’s no legitimate reason for this. If someone actually did overpay you, then they can cancel that on their end. You do not have to send money to someone ever. And you shouldn’t.

Other tips:

  • Don’t accept personal checks as payment. If you do, go to the bank with that person and make sure that you get the cash before you let that person out of your site.
  • Never Venmo, PayPal, or wire money without confirming that you know exactly why you’re doing so and how it all works.
  • Consider using and escrow service for large value sales like when you sell a car or a website.
  • Trust your gut. If a deal is too good to be true or feels fishy then it probably is.

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