Overpayment scams
Accommodation providers such as bed & breakfasts and motels should be careful when dealing with overseas bookings via email.
The overpayment ruse goes something like this. The accommodation provider receives an email from a person who claims to be arranging a conference in the area.
The scammer requests a quote for accommodation for a large number of people, often a church-based delegation.
Through a series of emails, the scammer hooks the trader’s interest. The scammer then offers a cheque hundreds or thousands of dollars more than the accommodation cost and requests the provider refund the difference.
The scammer comes up with a plausible excuse:
- There was a mix-up and the wrong amount was sent;
- Some guests had cancelled and the scammer wants a partial refund;
- The cheque includes their commission for arranging the conference;
- The money order was originally made out to another accommodation provider charging a higher rate but this fell through.
The cheque bounces and the accommodation provider is left hundreds and sometimes thousands of dollars out of pocket.
The scammer relies on the provider being so excited about the large booking that they do not question it too closely and want be as helpful as possible to keep their new “client” happy.
The scammer relies on banks taking time to clear an overseas cheque so that the provider is not alerted to the fraud until after they have “refunded” the difference.
Sometimes the payment is made through a third party or escrow company which turns out to be bogus.
Advice:
- Know who you are dealing with and independently confirm the buyer’s name, street address and telephone number;
- Don't assume that the cheque is legitimate, just because your bank accepts it for deposit. It takes time to clear an overseas cheque;
- Don’t accept a cheque for more than the accommodation cost, no matter how tempting. Ask for the cheque to be written for the correct amount. If they refuse, return the cheque;
- Verify bank cheques with the issuing bank. Get the bank’s phone number from directory assistance, not from the person who gave you the cheque.
If you would like to submit an example of this type of scam you can do so here.
