Tips for recognizing the overpayment scam

TORONTO, ONTARIO--(Marketwired - March 13, 2017) - "Oops, did I send you too much money? Sorry about that, why don't you send me back the balance after you cash my cheque?"

It sounds perfectly innocent, but the request is a classic sign of the overpayment scam where criminals send fake cheques and then cash in when you send back the extra money the scammer "accidentally" sent for their purchase. Whether you're selling an item online or looking for a roommate to help pay the rent, the approach is always similar:

• The scammer will send a cheque or money order for the item, but for an amount much larger than the asking price. For example, you're selling your item for $1,500 but the buyer/scammer sends you a cheque for $3,000.
  
  
• You will be instructed to deposit the cheque or money order into your account and then withdraw the excess money and send it to the specified third party account.
  
  
• Later, once the cheque or money order is processed, you'll find out that the cheque was fraudulent. You won't get any of the funds promised by the buyer, and worse, you will have handed over some of your own money right back to the scammer.
  
  
• In other cases, the scammer might claim they sent a larger cheque to cover the costs of shipping or customs fees. However, the outcome is the same; once you send back the "extra" funds, you'll discover the cheque was fake.

"If you're in doubt about a cheque you've received, or if the situation seems unusual in any way, don't go through with the sale until you have confirmed with your bank that the cheque is authentic and has value," says Terry Campbell, President of the Canadian Bankers Association. "Losing the sale is better than being out the item you were selling and the amount of the fraudulent cheque or money order.

It's important to remember that a cheque or money order is a payment agreement made between a buyer and seller. The bank processes the payment but they are not involved in the agreement. Individuals are responsible for the items they deposit into their bank account. If the item is returned as fraudulent, depositors are liable for the full amount.

How to protect yourself:

• Beware of buyers who send more money than you're asking for.
  
  
• Don't ask for a cheque or money order; instead, request electronic payment such as an email money transfer. This way, the funds are deposited into your account and are guaranteed right away and you don't have to wait for a cheque or money order to go through the clearing system to learn it is fraudulent.
  
  
• If you receive a cheque or money order that is more than the agreed amount of money, refuse the payment and send it back to the buyer.
  
  
• Know the personal details of your buyer, including their full name, telephone number and address.
  
  
• Remember to treat a money order like a cheque; these funds are not the same as cash and must be cleared and settled the same way that a cheque clears and settles.

The CBA is issuing tips and information through Twitter using the hashtag #FPM2017 (@CdnBankers) and its website www.cba.ca throughout the month of March. Canadians can also subscribe to the CBA's free Fraud Prevention Tip.

Background

• March is Fraud Prevention Month, and throughout the month, the CBA will be providing Canadians with information to help protect themselves from fraud.
  
  
• The CBA is a member of the Fraud Prevention Forum. The Forum is comprised of a concerned group of private sector firms, consumer and volunteer groups, government agencies and law enforcement organizations, who are committed to fighting fraud aimed at consumers and businesses.
  
  
• Through its partners, the Forum, chaired by the Competition Bureau, works to prevent Canadians from becoming victims of fraud by educating them on how to "Recognize it. Reject it. Report it."

About the Canadian Bankers Association

The Canadian Bankers Association works on behalf of 61 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 280,000 employees. The CBA advocates for effective public policies that contribute to a sound, successful banking system that benefits Canadians and Canada's economy. The Association also promotes financial literacy to help Canadians make informed financial decisions and works with banks and law enforcement to help protect customers against financial crime and promote fraud awareness. www.cba.ca.

Follow the CBA on Twitter: @CdnBankers

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