How does an overpayment scam actually work?
An overpayment scam involves a fraudulent cheque or payment for more than the agreed amount, with a request to refund the difference before the original payment bounces — leaving the victim out of pocket.
Last reviewed: 10 June 2026
Explanation
The scam typically starts when you are selling something online, renting out a property, or accepting payment for a service. The buyer sends a cheque, money order, or bank transfer for significantly more than the agreed price, explaining it as a mistake or a combined payment for something else. They then urgently ask you to send the overpaid portion back, often by wire transfer, gift card, or a secondary peer-to-peer payment.
The critical mechanics are in the banking system. A deposited cheque may appear to 'clear' in your account within a day or two, but the actual verification process — confirming funds exist at the issuing bank — can take weeks. Your bank may show the funds as available before they have verified. When the cheque ultimately bounces or is identified as counterfeit, the bank deducts the full amount from your account, and the 'overpayment refund' you already sent is gone.
The same structure applies to fake bank transfer notifications, fraudulent escrow confirmations, and forged money-order receipts. The scammer is never trying to buy your item — they are using your trust in your bank's interface to generate a temporary visible balance they can convert into an irreversible cash transfer.
Variants target landlords (fake tenant deposits), freelancers (fake client payments), and charity fundraisers. Any context where a third party is paying you more than owed and requesting the difference back should be treated as a potential overpayment scam.
Common red flags
- A buyer or client sends significantly more than the agreed amount
- An explanation for the overpayment is provided but sounds implausible
- There is urgency to refund the difference immediately, before you can verify funds
- The refund is requested by a different method than the original payment
- The payer declines to have their bank cancel and reissue the correct amount
- Contact began on a classifieds or marketplace site and quickly moved off-platform
What to do now
- Do not send any refund until the original payment has fully cleared — ask your bank what 'cleared' means for that specific payment type
- Ask the payer to cancel the overpayment and send the correct amount instead
- Contact your bank's fraud team if you have already sent a refund
- Report to the platform where you were contacted and to your national fraud authority
- Keep all correspondence as evidence
- Be aware that cashier's cheques and money orders can also be forged
Frequently asked questions
If my bank shows funds as available, does that mean the cheque has cleared?
No. 'Available' means the bank has provisionally credited your account. Actual clearance — confirming the funds genuinely exist — takes longer and varies by payment type.
Why can't the scammer just send the exact amount?
The overpayment is deliberate. The refund you send uses your real funds; the original payment is fraudulent. The 'extra' amount is their profit.
Can this scam happen with legitimate payment platforms?
Yes. Fraudsters send fake notification emails mimicking PayPal, Zelle, or similar services claiming payment was made. Always verify within the app itself, not via email.