Overpayment Scams Cost Online Sellers Millions

By Nancy K. Crevier

Mary and Ray Maki of Newtown, wintering in Florida, did not fall for the Internet overpayment check scheme when trying to sell a low vision machine online, but not everybody is wise to the ploys that bilk millions of dollars from victims worldwide each year.

The scheme is in response to ads placed in local papers or online. The potential buyer contacts the seller and sends a message notifying the seller that they will be sending a certified check or money order to purchase the advertised merchandise. The bogus buyer may state that a representative from a shipping company will arrange the pick up and that an overdraft payment to cover the merchandise as well as the shipping costs will be sent to the seller, requesting the seller to pay the shipping company.

Or, the “buyer” might say that the payment will be coming from a third party, asking that the seller deduct his or her share, and send the rest back to the buyer.

A third variation finds the phony buyer claiming that the wrong amount — sometimes thousands over the cost of the purchase — has been sent and asks that the seller return the excess amount. The would-be buyer sometimes claims, as well, that he/she is unable to go through with the transaction, after the check or money order has been cashed, and asks the seller to return the full amount to the buyer.

What Ms Maki found out at ic3.gov/crimeschemes, a partnership between the FBI and the National White Collar Crime Center, and at fakechecks.org, is that the check or money order turns out to be no good. Not only is the victim on the hook to the bank for the amount of the product being sold, but often for the thousands more dollars of the overpayment check.

“It really bothers us that people are scamming elderly and/or needy people,” said Ms Maki. Their first encounter with this type of Internet fraud was when she and her husband were in upstate New York on Christmas Day. They met a person selling puppies who was ready to go to the bank with an overpayment check he had received. “We told him, ‘Don’t do that!’” Ms Maki said.

“We are Internet ‘savvy’ I guess,” said Ms Maki. “When the guy at Christmas told us the scenario — he was to cash the ‘certified check’ that was made out for more than the asking price — and then someone would come pick up the puppies and take the ‘overdraft,’ which I think was over $1,000, our bells started going off. We warned him against following through. I hate to think what they would have done with the puppies,” Ms Maki said.

 It was this very situation that prevented them from being duped when an e-mail in response to their ad for the low vision machine was identical to that received by the dog seller in New York.

“Bingo,” Ms Maki said. “Same exact thing.”

Ms Maki may have sniffed out the suspicious check scam due to the fact that as the president of Friends of the C.H. Booth Library that sponsors the huge yearly book sale each summer she had investigated check fraud and written an article for the Friends of Connecticut Libraries 2007 fall newsletter addressing the subject.

“Several Connecticut library book sales were the victims of a check fraud this year. The perpetrator is familiar with each book sale and for how much he can write a check for at each sale. He prints his own checks utilizing different names and addresses, and then alters a driver’s license to correspond with the checks. He hits his targets early the first day of the sale — a time when the dealers and early birds are shopping; a hectic time when volunteers are stretched to the limit,” wrote Ms Maki in her article. It is just one more variation of check fraud.

The layperson selling merchandise needs to be wary of transactions that become suddenly more complicated than need be. There is no reason that a seller needs to be the in-between person for the buyer and shipping company. The buyer could just as easily send the shipping company the money directly.

Funds can be transferred electronically, negating any reason to get involved in a third party transaction. Be particularly suspicious if the buyer is from a foreign country.

Any time a check is made out for a large amount more than necessary, return that check to the buyer and ask for a check made out for only the proper amount. Do not cash the check or money order, as it is quite likely counterfeit.

According to the fbi.gov website, mass marketing fraud costs US citizens millions of dollars every year, and the elderly are often the targets of the schemes. Complaints concerning suspicious scams can be filed at ic3.gov.

The Makis did not respond to the e-mail that they received, and they still have the low vision machine. “I will find other ways to advertise it for sale,” said Ms Maki. Any takers?