Overpayment Scams
Americans lost $12.5 billion to fraud in 2024, according to the FTC.
Quick Answer
Overpayment scams trick sellers by sending a fraudulent payment for more than the agreed price and then requesting a refund of the difference, with the FBI's Internet Crime Complaint Center (IC3) receiving 2,194 complaints for this scam type in 2025.
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How It Works
1
A scammer, posing as a buyer, contacts a seller on an online marketplace like Facebook Marketplace or Craigslist and agrees to purchase an item.
2
The scammer sends a payment for more than the asking price, typically using a counterfeit cashier's check, personal check, or a fraudulent online payment.
3
The scammer provides an urgent excuse for the overpayment, such as a mistake or needing extra funds to cover shipping costs, and asks the seller to deposit the payment and immediately send back the excess amount.
4
The seller sends the "refund" using an irreversible method like a wire transfer, gift card, or peer-to-peer payment app. Days or weeks later, the bank discovers the original payment was fraudulent, reverses the deposit, and the seller is liable for the full amount, losing the money they sent to the scammer.
Red Flags
- The buyer sends a check or payment for more than the agreed-upon price.
- You are pressured to refund the overage immediately, before the original payment has had time to officially clear.
- The buyer requests the refund be sent via wire transfer, gift cards, cryptocurrency, or a mobile payment app like Zelle or Venmo.
- The buyer has a complicated story to explain the overpayment and why you need to send money to them or a third party.
- The check or payment is from a person or company different from the buyer.
- The buyer is located overseas or provides a shipping address that is different from their own.
- The buyer shows no interest in negotiating the price or seeing the item in person.
What to Do If Targeted
- Do not accept a payment for more than your selling price. Return or destroy the check and insist on the exact amount.
- Never send money back to someone who overpaid you. Cancel the entire transaction immediately.
- Wait for a check to officially clear with your bank before sending merchandise or providing services, which can take weeks. Just because funds are available in your account does not mean the check is legitimate.
- If you have sent money, contact your bank or the wire transfer service immediately to report the fraud and ask them to stop the payment.
- Cease all contact with the scammer and do not provide any more personal or financial information.
- Keep all records of communication, including emails, text messages, and receipts, as evidence for law enforcement.
How to Report It
- FTC — File a fraud report with the Federal Trade Commission, which shares information with law enforcement agencies.
- FBI IC3 — Report internet-related crime to the FBI's Internet Crime Complaint Center (IC3).
- U.S. Postal Inspection Service — Report scams that use the U.S. Mail, such as receiving a fraudulent check.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- The FBI's Internet Crime Complaint Center (IC3) received 2,194 complaints specifically categorized as Overpayment scams in 2025. — FBI IC3 2025 Annual Report
- Consumers reported losing over $12.5 billion to all types of fraud in 2024, a 25% increase from the $10 billion lost in 2023. — Federal Trade Commission (FTC) 2025
- In 2024, the median fraud loss for victims in their 70s was $1,000, significantly higher than the $417 median loss for victims in their 20s. — Federal Trade Commission (FTC) 2025
- For fraud reported in 2024, bank transfers and payments accounted for the highest aggregate losses at $2.09 billion, followed by cryptocurrency at $1.42 billion. — FTC Consumer Sentinel Network Data Book 2025
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Frequently Asked Questions
An overpayment scam occurs when a scammer sends a seller a payment, usually a fake check, for more than the agreed-upon price. The scammer then asks the seller to refund the excess amount using an untraceable method like a wire transfer or gift card. The original payment eventually bounces, and the seller loses the money they sent as a 'refund'.
Federal law requires banks to make deposited funds available to you within a few days. However, it can take weeks for the bank to discover that a check is counterfeit. When the check bounces, the bank will withdraw the full amount from your account, and you will be responsible for repaying it, including any money you sent to the scammer.
If you paid a scammer, immediately contact the financial institution you used for the transaction, such as your bank, wire transfer service, or gift card company. Report the transaction as fraudulent and ask for it to be reversed, though recovery is not guaranteed. You should also report the scam to the FTC at reportfraud.ftc.gov and the FBI at ic3.gov.
No, overpayment scams can occur in various situations beyond online marketplaces. They also target landlords receiving security deposits, freelancers getting paid by new clients, small businesses, and people rehoming pets or selling tickets. The core tactic of sending a fraudulent payment for too much and requesting a refund remains the same.
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