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Overpayment Scam

24th May 2016

For the attention of:  Irish Businesses

Purpose of Advisory

A number of businesses in Ireland have recently been targeted by fraudsters posing as new customers. They order goods or services for which they make an overpayment and then seek a refund. The original order payment, usually a cheque or draft, later turns out to be bogus leaving the business with a loss.

A PDF version of the Overpayment Scam alert is available to download here.

Key Details

 How Does the Scam Work?

  • The fraudster targets a legitimate seller of goods/services
  • They pose as a new customers, often based abroad, and make an initial order
  • Payment is generally made by a cheque or draft that is delivered directly to a bank branch (even if an electronic method of payment has been discussed)
  • The sum received is higher than the purchase price of the order
  • The seller then receives a request, usually be email, to return all or part of the monies electronically as quickly as possible
  • While the seller is pressured to return the money, the original cheque or draft, which is usually forged, counterfeit or fraudulently altered in some way, will be rejected and not paid – so the seller loses out

Red Flags

 Businesses should be wary of the following

  • New customers and/or an unusually large orders
  • Customers who will only provide an email address for contact purposes
  • When the method of payment differs from what was previously discussed e.g. customer has been paid by means of cheque when an electronic transfer was agreed and expected
  • Buyers who make a payment above the quoted or invoiced price and ask for the overpayment to be returned electronically
  • Customers who put you under pressure to release goods/funds without undertaking essential checks


 To Protect your Business from overpayment Scams

  • Always make sure you know that any funds paid into your account are irrevocable before making a refund
  • Always exercise caution when forming new relationships with potential customers, undertaking appropriate due diligence
  • Never feel pressured into making a refund until you are sure original funds are legitimate and secure
  • If you are concerned you have been targeted by an overpayment scam, immediately contact your Bank and report to the Gardaí / Police

 This is a general notice issued by the Financial Crime and Security Department of BPFI on behalf of BPFI members.

Disclaimer Note: The information contained in this Fraud Alert /Advisory is for general guidance and for information purposes only and is intended to enhance awareness and vigilance regarding this fraud.


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