Overpayment Scams – When “Extra Money” Isn’t a Bonus

Overpayment scams are our focus of the fourth week of Fraud Prevention Month.

These scams commonly occur through online marketplaces, classified ads, social media platforms, emails, text messages, or phone calls where fraudsters pose as legitimate businesses or clients.

In an overpayment scheme, a fraudster sends a payment for more than the required amount and then asks the victim to return the difference. The original payment is later discovered to be fraudulent or counterfeit, leaving the victim responsible for the full loss.

Recognize

Red flags that may indicate an overpayment scam:

• A payment is received for more than the agreed-upon amount. The fraudster may claim it was a mistake or offer explanations such as shipping costs, agent fees, or account errors
• There is pressure to return the funds quickly, before payment can be property verified
• The victim is instructed to send the refund using hard-to-recover methods such as e-transfer, wire transfer, gift cards, or cryptocurrency
• The buyer or client claims to be out of the country or unable to meet in person

Reject

• Never send money back for an overpayment. If someone overpays, cancel the transaction and return the payment through the original method - after it has fully cleared
• Always verify payment before releasing goods or issuing refunds. Funds appearing in your account do not guarantee the payment is legitimate
• Be cautious. Legitimate businesses or buyers will not intentionally overpay and request money back

Report

• If you have NOT suffered a loss, report to the Canadian Anti-Fraud Centre
• If you have suffered a loss, report to the Lethbridge Police Service and your financial institution

More Resources:

• Canadian Anti-Fraud Centre
• Lethbridge Police - Frauds and Scams website