Business Overpayment Refund Scam via Cashier's Check
A 'customer' sends a small business a cashier's check for more than the agreed amount, then asks for the difference back before the bank discovers the check is fake.
Part of: Business Overpayment / Refund Scam
Last reviewed: 5 July 2026
Cashier's checks are widely trusted as 'as good as cash,' which is precisely why this scam relies on one — banks are required to make funds available quickly, well before they've actually confirmed the check is genuine.
How this scam works on cashier's check
A scammer poses as a customer, client, or new hire and sends a business a cashier's check for significantly more than what's owed, then explains the overpayment was accidental or covers an additional expense like shipping or a 'consultant fee,' asking the business to deposit the check and wire or send back the difference. Because banks often make provisional funds from a cashier's check available within a day or two, the business believes the money has cleared and sends the refund.
Days or weeks later, the bank discovers the original cashier's check was counterfeit or drawn on a closed or fraudulent account, reverses the provisional credit, and the business is left having sent real money to the scammer while now also owing the bank for the reversed deposit. This scam frequently targets businesses expecting legitimate payments, such as freelancers, contractors, or online sellers, since a check for 'too much' can be mistaken for a simple client error rather than fraud.
Common red flags
- A payment arrives for noticeably more than the invoiced or agreed amount
- The payer asks for the difference to be refunded via wire transfer or gift card before the check has fully cleared
- The explanation for the overpayment is vague or involves a third party (a 'shipping agent' or 'consultant')
- Pressure to send the refund quickly, before you'd naturally verify the check has cleared
- The check is a cashier's check or money order from an unfamiliar or out-of-state bank
- The customer relationship is new or was only established shortly before the overpayment
How to protect yourself
- Wait for a cashier's check to fully clear (confirmed by your bank, not just provisionally available) before refunding any amount
- Call the issuing bank directly using a number you look up independently to verify the check is genuine
- Be suspicious of any customer who overpays and asks for a refund of the difference
- Never send a refund via wire transfer or gift card for an overpayment
- Set a business policy requiring any overpayment to be handled only after full check clearance and manager review
- Train staff who handle payments to flag overpayment refund requests for verification before acting
How to report it
- Report the scam to the FTC at reportfraud.ftc.gov
- Report the counterfeit check to the issuing bank listed on the check
- File a complaint with the FBI's Internet Crime Complaint Center (IC3.gov)
- Report to your bank's fraud department to flag the deposited check
Frequently asked questions
Why does my bank make funds from a cashier's check available before it's actually verified?
Banking regulations require provisional availability of funds within a short window even for cashier's checks, but that availability doesn't mean the check has been confirmed genuine, which can take much longer to detect if it's counterfeit.
What should I do if I've already refunded an overpayment and the check bounced?
Contact your bank immediately to report the fraud, file a report with the FTC and IC3.gov, and understand that recovering funds already sent to the scammer is unlikely, though reporting helps investigations and may assist other victims.