Payment Scams
What are Overpayment and Refund Scams?
Overpayment Scams
Scams involving scammers sending victims more money than originally agreed upon, with the expectation that the victim will return the excess or overpaid funds, exploiting the victim's kindness. Such deceptive schemes particularly target individuals engaged in online or social media sales, making them susceptible to financial harm.
Refund Scams
A refund scam can occur whenever money is in play. If someone sends you money and claims they've sent an excessive amount, requesting you to return the surplus or send it elsewhere, it is imperative to exercise extreme caution. Even if the individual appears sincere and insists it was an honest mistake, it could still be a potential scam.
How do Overpayment/Refund Scams Work?
At the most basic level, refund and overpayment scams manipulate victims into unwittingly sending money to scammers. Typically, a scammer wilt send a victim an initial sum of money and falsely claim they've sent an excessive amount. Subsequently, they will request that you return the surplus funds to them. Believing that you'll still come out ahead financially, you send the extra money. However, the problem arises because the initial transaction, where the scammer sent you money, will ultimately fail, leaving you without extra funds. Consequently, you'll discover that you've actually sent your own money back to the scammer, not the excess amount.
This scheme is frequently executed using checks, where the scammer instructs you to deposit a check for a specific sum and then asks you to return a portion, citing an overpayment. When you send back the extra funds, the check bounces, resulting in the deducted amount from your account.
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Listen to this Podcast!
In this podcast, we speak to Ben, a 19-year-old art student in Toronto, who was the victim of a refund scam online when selling his art. Listen to Ben's story on how he was tricked by a clever scammer and learn ways you can identify problematic situations for yourself.