This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Deposed Nigerian Prince Now Buying Your Goods Online

Stocks in this article: NU

In a report on overpayment fraud out from Western Union (WU), it says that con artists are increasingly fleecing people via online sales transactions, using overpayments as the bait.

Here's how the scam works (against everybody including that poor, unsuspecting women's apparel retailer selling her weighted skirt magnet), directly from the Western Union report:

  • 1. Fraudsters play the role of buyer and target consumers selling a service or product, generally online.
  • 2. The "buyer" sends the seller a legitimate-looking check for an amount higher than the agreed-upon price.
  • 3. They concoct an explanation for this overpayment ("Oops, my mistake." or "Some of the overpayment is a commission for you.") Then they ask the seller to deposit the check and wire back the excess money.
  • 4. Weeks later, the victim learns the check is a fake but is still on the hook to pay the bank back for any money withdrawn.
  • Most interesting about the latest and greatest in online fraud is that it turns existing conventional wisdom about predatory online behavior on its head by making the seller, as opposed to the buyer, the target of the scheme.

    "It's a common misconception that only people who buy online are at risk for fraud, but sellers are at risk too," Shelley Bernhardt, director of consumer protection at Western Union, said in the report. "They're susceptible to clever con artists who use counterfeit checks to get them to send real money."

    To help online vendors avoid being victimized by the online sales scam, Western Union offers some tips:

  • Don't close the sale unless you know who you're dealing with. Make sure you get all the contact information from the buyer, including name, address, phone number, e-mail address, and web site, if applicable. If you can't verify any of those contact sources independently, don't go through with the sale.
  • Reject an overpayment. If the buyer pays by check or money order, and the figure is more than the agreed price, don't deposit the payment. The overpayment is the hook: Once you deposit the check and make up the difference, you've left yourself wide open for fraud.
  • Ask if the buyer uses PayPal or another online payment service. PayPal won't process a payment until it knows the payment is legitimate. When possible, insist on PayPal for your online deals -- it is a great firewall against the online sales scam.
  • Never wire money to a buyer. If there is an overpayment issue, don't wire money to make up the difference. Scammers love bank wire payments because they can pick up the money as cash, making it almost impossible to trace for law enforcement officials.
  • Wait for the check to clear. Another good idea -- wait for the check to clear before you deal with the aftermath of any overpayment issue. A few days of patience can avoid a few weeks of pain, especially if that check is bogus.
  • Some simple common sense goes a long way in fighting online sales scams aimed at your bank account.

    Just be vigilant, be patient upon receiving a check, and avoid bank money wires, and you should be able to easily avoid becoming an easy mark for the latest schemes dreamed up by nefarious online fraudsters. As for that deposed Nigerian prince, he really does need the money. In fact, maybe you should overpay him.

    More on fraud:

    Beware bank transfer scams

    ATM pins tied to financial fraud

    Mortgage fraud declining

    By Brian O'Connell

    Follow TheStreet on Twitter and become a fan on Facebook.

    2 of 2

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 17,356.87 +288.00 1.69%
    S&P 500 2,012.89 +40.15 2.04%
    NASDAQ 4,644.3120 +96.4780 2.12%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs