Overpayment Scams

Dear Consumer Ed:

I posted an item for sale online and received an email from an interested buyer, saying he wanted to send me a certified check. He said the check will cover the cost of the item plus the expense incurred by the person who will pick up the item on his behalf. I am being asked to deposit the check and then wire a portion to the person picking up the item. Do you think this is a scam?

Consumer Ed says:

This sounds like a classic check overpayment scam. Scammers often pose as potential buyers and come up with a reason to pay you more than the sales price. They then send you a check for the higher amount and ask you to wire part of the money back to the “buyer” or his associate. They often try to lend credibility to the scam by printing the words “Cashier’s Check” or “Certified” on the check. But don’t be fooled. The check is counterfeit, and you are the one responsible for repaying the bank the amount that was wired to the scammer.

A consumer might understandably assume that they are safe to wire money to someone if they first wait for the check to clear, but this is not the case. Just because a check has “cleared,” it does not guarantee that the money is actually there from the issuing bank. Banks are required to make funds available to their customers quickly (in a few days), but it can sometimes take a couple of weeks to discover that a check is counterfeit.

Below are some tips to help you avoid check overpayment scams:

  • Know who you are dealing with – independently confirm the 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, and you have limited recourse if there is a problem with a wire transfer.
  • 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 of your choosing.

If you believe you have been a victim of a check overpayment scam, you can file a complaint with the Georgia Department of Law’s Consumer Protection Division by calling (404) 651-8600 or by going to www.consumer.ga.gov.

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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