The Federal Trade Commission (FTC) is warning consumers to watch out for “Check overpayment” scams targeting consumers selling cars or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck with a big loss when scammers pass off bogus cashier’s checks, corporate checks, or personal checks.
The FTC has issued a new consumer alert, “Check Overpayment Scams: Seller Beware,” that explains this scam and offers consumers tips on how to protect themselves and their pocketbooks.
According to the FTC, a check overpayment scam begins when a scam artist replies to the classified ad or auction posting and offers to purchase the item for sale with a check, then comes up with a reason for writing the check for more than the purchase price for the item. The scammer asks the consumer to wire back the difference after the check is deposited. Later, the scammer’s check bounces, leaving the consumer liable for the entire amount. The FTC says the scam is able to progress because, though the checks are counterfeit, they may look good enough to fool bank tellers.
The FTC gives the following tips to avoid check overpayment scams:
In another version of the scam, a consumer is asked to pay taxes or fees on “foreign lottery winnings.” When he or she goes to cash the “winnings” check, the sender claims to be trapped in a foreign country with no way to produce the cash. The FTC offers the following advice for consumers: throw away any offer that asks you to pay for a prize or “free” gift; and do not enter foreign lotteries – most solicitations for them are fraudulent, and it is illegal to play a foreign lottery through the mail or by telephone.
The FTC’s alert is available at www.ftc.gov/bcp/conline/pubs/alerts/overpayalrt.htm. Consumers who have been victims of check overpayment scams should file a complaint with the FTC at www.ftc.gov.
