What Are PayPal Overpayment Scams & How To Protect Yourself From Them?

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PayPal is an online payment processor that operates on a worldwide scale and provides its services in more than 200 countries. Due to the fact that it is such a popular site, it has very stringent standards and security measures. Despite this, several retailers are still susceptible to fraudulent PayPal chargeback schemes due to the high volume of daily transactions.

You absolutely have to educate yourself on how to spot a fraudulent PayPal chargeback in order to protect yourself from being a victim of one. In this article, you’ll learn about the many sorts of scams involving PayPal overpayments as well as the best techniques to prevent falling victim to them!

An Overview of Paypal Overpayment Scams

Paypal Scam

The amount of money transferred to a seller’s PayPal account by scammers occasionally exceeds the cost of the item they are purchasing. They will inform the seller and ask for a refund of the difference once they realize they overpaid.

After the seller returns the overpaid amount, the con artist contacts PayPal to assert that their account was disrupted and that they never really intended to pay the seller. Due to PayPal’s policy of fully reimbursing the original payment to the con artist, even if the seller hasn’t shipped the purchased item yet, they still lost the “overpaid” amount they sent back.

Fortunately, it’s easy to recognize this con.

One choice is to reject any PayPal direct payments and demand that customers go through the checkout process instead. Even so, you can still stop this scam by issuing a full refund and requesting a new payment for the correct amount, even if you want to accept direct payments.

If you’re a victim of a Paypal scam please get in touch with us to that we can help you get your money back!

How the PayPal Overpayment Scam Works

In this overpayment scam, the con artist assumes the identity of PayPal and purposefully sends you more money than was initially agreed upon (i.e., an overpayment). They then ask you to wire them the money they “accidentally” overpaid.

After you’ve returned their money, they’ll either cancel the credit card they used to pay you through PayPal or submit a claim for reimbursement with PayPal. The item you were selling will then be gone, along with the payment for it and the additional overpayment you returned to the con artist.

Here is how each stage of the con operates:

1. You Receive Overpayment for Your Item

Overpayment

Either in an online store or a community marketplace, you are selling a product online and offering PayPal as a payment method. Someone buys your item and pays you via PayPal more than you requested.

These scams are frequent on websites like Craigslist and Facebook Marketplace.

2. Buyer Asks for Refund on Overpaid Amount

The buyer will get in touch with you and request a refund of the overpaid amount once the payment shows up in your PayPal account. They’ll argue that the overpayment was an error and that they were trying to send you a tip or include shipping but sent too much by mistake.

The message might appear plausible and like a genuine error, but this is a warning sign. The second warning sign is when they request money be wired to them as opposed to returning the purchase via PayPal.

Example of a Scammer’s Message:

I apologize for the mishap. $50 was transferred in error. Please send the extra money to me via wire transfer. Thank you.

3. Buyer Files A PayPal Reimbursement Claim or Cancels the Payment

Cancel Payment

There are two scenarios in which the con artist may defraud you of your money:

  • They’ll submit a PayPal reimbursement request.
  • They’ll revoke the credit card they used to buy your product.

In the first case, they might submit a PayPal reimbursement request after you’ve wired the excess amount back to them, claiming they never intended to send you money. They may also request a full refund of the product’s price. In this scenario, the con artist can double their fraud by getting money from both you and PayPal’s reimbursement.

It’s also possible that the con artist used a stolen credit card to send you the money via PayPal. In that situation, the authorized credit card user reports any unauthorized activity. Even if you had already sent the con artist money and the item, the credit card company will then cancel the transaction and allow you to withdraw the funds from your account.

Red Flags of the PayPal Overpayment Scam

Paypal Overpayment

Overpayment scams can be challenging to spot, but some telltale signs are as follows,

The buyer is anxious for you to give him his money back. They want you to send them money if they’re using a stolen credit card so that the credit card company won’t report them and cancel the transaction.

The customer demands that you wire them money and won’t cancel the order. Because they wouldn’t receive anything, the con artist does not want to cancel the order. They will insist that you conduct a wire transfer because their scam only succeeds if you send them money otherwise than through PayPal.

Their communications are imprecise and grammatically incorrect

Scammers frequently leave vague notes in their victims’ mailboxes, such as “I tried to buy your item using PayPal and sent too much,” rather than being specific about what they bought and how much they sent. 

They copy and paste the same messages to everyone they are trying to scam because they are running multiple scams at once.

In PayPal overpayment scams, the buyer may ask you to use the additional funds to pay a shipping company or attempt to convince you that it was an accident (of their choice). Whatever their justification, you must always cancel the transaction and consider any overpayment to be a scam.

After a buyer has overpaid you, the second red flag of a PayPal overpayment scam is a request for a wire transfer refund. You should have no trouble issuing a PayPal refund to a legitimate buyer. They only accept wire transfers because they are quicker, and there is very little to no chance that you will be able to get your money back from them afterward (whereas PayPal does offer some protection).

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    How to Beat PayPal Overpayment Scams

    Considering many people don’t hesitate to return money to someone who didn’t mean to pay, overpayment scams are successful. 

    Additionally, they are effective because the con artist makes you feel guilty by refusing to return your money. In an effort to convince you to comply with their demands, the con artist may accuse you of stealing their funds if you choose not to wire the money to them.

    This PayPal scam is simple to avoid, but you won’t be aware of it until the buyer sends you money. Even though you wasted your time and effort trying to sell your item to a fraudster, you still have time to take precautions to avoid losing your money!

    Cancel the Transaction

    In the event that the buyer sends more money than requested or requests payment via wire transfer, you should:

    • Reject the order (and transaction)
    • Don’t send them any money via wire transfer.

    Cancel Their Order

    Order Cancelled

    Don’t wire someone money if they ask you to after they overpay for a product. Instead, inform the customer that you will cancel their order and that there will be no charge or withdrawal from their account as a result.

    By getting in touch with their credit card company, you can further encourage them to reverse the transaction on their end. They ought to accept this course of action if they are an honest buyer.

    Refuse To Wire Additional Sums Of Money

    If you wire money separately, PayPal has no record of any refunds occurring. As a result, even though you already reimbursed the scammer separately, they can submit a claim for reimbursement and have the money they sent you taken from your PayPal account.

    When a customer overpays for an item, you should exercise caution and think about terminating the sale. It’s usually a scam, but they’ll usually claim it’s an accident or that the extra money is needed to pay a shipping company or another third-party company.

    Are You a Target Of the PayPal Overpayment Scam?

    Anyone who accepts PayPal payments for goods is vulnerable to scammers. They frequently ask you to send them money rather than a free item when you respond to their requests.

    Additionally, con artists might search for service providers. In this case, a con artist might get in touch with you first to tell you about a project they need your help with and to offer you a reasonable wage. They then make a prepayment offer and send you an excess payment. They will then ask for their money back, claiming that it was an error or that they meant to tip you but sent too much.

    If you give the con artist money, PayPal or the credit card company might cancel the transaction, leaving you with the overpayment amount.

    Safeguard Your Assets With Global Payback

    Safeguard Assets

    If you’ve fallen victim to this PayPal overpayment scam, be sure to notify PayPal right away. If you ever feel duped, the first thing you should do is cut all ties with the con artist. Don’t divulge any personal information to them that could put you at risk of fraud from other sources.

    Whenever you need to make a financial transaction online, be sure to use a secure server and a reliable website.

    If you believe you are being scammed, change all of your passwords, delete any malicious software you may have downloaded, and, if necessary, get in touch with your credit card company. Contact your local law enforcement organization to report the scam and get help with the next steps.

    You can also reach out to Global Payback, a reputable business that assists people who have been defrauded or had their personal information stolen.

    The Global Payback provide information about Paypal scam and how to avoid them.

    Lost money to online fraud? We will recover your funds !

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      We do understand that you’ve already been scammed online and that you’re naturally afraid of paying online. This is why we do offer a free case review, and won’t charge anything if your case isn’t qualified. Please do your part of the deal, and submit your case only if you truly intend to proceed with the recovery process.


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