Local Business Narrowly Avoids Overpayment Scam

Craigslist can be a great resource of items to buy and sell but it is an open market for scam artists. BBB warns consumers and businesses to be aware of who you are dealing with online. A Cincinnati based book publishing business was recently victimized just a couple weeks ago when their account number was stolen and a check was written to a consumer in Texas selling a building listed on Craigslist.

A 10×10 building was listed for $800. A buyer texted the seller stating he wanted to purchase the building and sent the seller a check via UPS for $1,917.13 – an amount considerably more than the selling price listed. The buyer explained the extra amount would cover shipping fees. When the consumer went to cash the check at a local check cashing place, the clerk informed her it was a fake check.

It turns out, the buyer stole the account number from the Cincinnati based book publishing company, created the fake check with the business’s name on it and sent the check to the seller to cash it. While waiting for the transaction to take place, the buyer texted the seller to see when they cashed it. Fortunately, the book publishing business set up the associated stolen account number as a deposit only account for wired funds. So when the seller tried to cash the check, the book publishing business was immediately alerted when there was an attempt to withdraw funds.

The seller in Texas was lucky not to have cashed the check or paid anything out to the buyer, because if she did, she would have lost a lot of money. To date, the buyer is still at large. The consumer reports he will not answer phone calls or text messages after she told him that the check was fake.

This is a classic case of an overpayment scam that typically affects consumers but is an excellent example of how it can affect businesses. If the seller would have successfully cashed the check, she would have been instructed to wire the excess funds to the buyer or another third party vendor. In this case, since the account was set up to accept deposits only thereby alerting the seller, the scammer was unsuccessful in carrying out his scheme.

Here are the red warning flags to watch out for:

  • Deal locally when selling through online and offline classifieds. This avoids confusion for pickup, shipping or other costs.

  • Only accept cash payments. Personal, business and cashiers checks can be copied, and hard to verify; a bank confirming “availability” of funds is not good enough.

  • When renting property, check references. Interview the renter; ask for proof of employment and check them for accuracy. Provide a lease or written agreement so all details are understood between you and the renter.

  • Take precautions to protect yourself. Since many online and classifieds transactions are completed in person—such as a direct cash/merchandise exchange—always meet in a public place and don’t go alone. If a local buyer or seller is unwilling to complete the transaction in person, it may be a warning sign.

When listing anything on Craigslist or any online selling site, use caution. If sounds too good to be true or the buyer begins to back out of the sale, there is a good chance it’s a scam. Start with someone you can Trust. Visit bbb.org.

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About Sandra Guile

Sandra Guile is the Community Outreach Specialist for BBB. She promotes BBB’s message of marketplace ethics through public speaking engagements, presentations, media relations, press releases, web content, and other written materials. BBB|Cincinnati is located at 1 East 4th Street Suite 600 Cincinnati, Ohio 45202 - to reach the office, call (513) 421-3015.