Hawaii’s BBB is warning local businesses not to fall for overpayment scams. This type of fraud happens when a customer sends payment for or offers to pay an amount much greater than the cost of their purchase, and then requests a return of the excess funds—usually by wire transfer. Businesses that deposit the checks, money orders or credit card charges ultimately find out they are counterfeit, leaving the company liable for the losses.
The types of businesses targeted by this scam vary, as do the methods of contact. Yesterday, a restaurant in Honolulu contacted Hawaii’s BBB to report an attempted overpayment scam via e-mail.
Hawaii's BBB offers the following advice to business owners to help identify and avoid overpayment scams:
- Know who you’re dealing with. Ask for and verify the buyer’s name, street address and telephone number.
- Don’t accept a check for more than the purchase price of the product or service. If the buyer refuses to pay the correct amount, return the payment and do not send the merchandise.
- Don't assume that the check is legitimate, just because your bank accepts it for deposit. It may take weeks for the bank to learn that it is counterfeit. You are the party who is ultimately liable to your financial institution.
- Verify all accounts, checks, money orders and credit cards with the issuing bank. Ask for the name and location and then get phone number from directory assistance or a trustworthy Web site, not from the person who gave you the check. You may want to ask for a check drawn on a local bank or a bank with a local branch.
- If a customer objects to providing any of the information requested, explain that these procedures are for their protection, as well.
- If the customer still refuses to provide the information, abandon the conversation and advise that you are not prepared to do business this way.
If you suspect that your business has been the target of an overpayment scam, find out how to report it to authorities and help warn other local businesses by contacting Hawaii’s BBB.