Financial Literacy

Overpayment scams are fairly common, and for the unaware, they can be difficult to spot. Let’s take a look at these scams and what you need to know to avoid falling victim to these ruses.

What is an overpayment scam?

In an overpayment scam, fraudsters target an individual who’s selling a large item online, such as a car. The scammer will reach out to the seller, offering to buy their car for more than the asking price. Then, they’ll send the seller payment in the mail.

At this point, the seller is thrilled. But, when the check comes, it brings with it a surprise – they’ve been overpaid. Soon after, the alleged buyer contacts the seller to ask them to refund the surplus. The seller may think it’s strange, but they comply, not wanting to keep money that isn’t theirs. The next thing they know, the original check hasn’t cleared and they realize they’ve been scammed. Not only have they not been paid for the purchase they believed the check writer was buying, but they’ve also lost the money they’ve sent back to the scammer.

Red flags

When selling an item on an online platform, look out for these red flags, which can alert you to a possible overpayment scam:

• You’re offered more than your asking price for an item you’re selling online.
• You get paid more than you’re owed for an item you’re selling.
• You’re urged to act quickly and take up a buyer on an offer or risk having them pull the offer off the table.
• You’re asked to refund an overpayment via wire transfer or prepaid debit card.

If you encounter any of these red flags while trying to sell an item online, do not engage with the “buyer.” Block their email address and mark it as spam to avoid further contact from the scammer. You may also want to report them to the platform you’re selling the item on to help stop them from reaching out to others.

How to avoid overpayment scams

The FTC offers the following tips for avoiding overpayment scams when selling online:

• Always know who your buyer is. Confirm the buyer’s name, street address and telephone number independently.
• Never accept payment for more than your selling price.
• Never agree to finalize a transaction until the buyer’s check has completely cleared. This can take several days.
• Never agree to wire funds back to a buyer.
• Don’t be tempted by offers that urge you to “act now.” If a buyer is offering you a price that seems too good to be true, it may just be a scam. Slow down, and research the buyer thoroughly before reaching any agreements.
• It’s best not to accept payment by a check from an unknown buyer.
• If you do accept payment by check, ask for a check that’s associated with a local bank, or a bank with a local branch. This way, you can visit the bank to determine if the check is authentic. If you cannot get a check from a local bank, ask for the bank’s phone number and call it to verify its validity.
• If cash is not an option and you want to avoid checks, consider an alternative method of payment, such as an escrow service or online payment service. If the buyer wants to use a service with which you are not familiar, verify its legitimacy before agreeing to accept payment from this service. You can research its website, customer service hotline, read its customer reviews and more.

If you’ve been targeted

If you believe you’ve been targeted by an overpayment scam, there are steps you can take to mitigate the damage.

First, report the scam to your financial institution, as they may be able to reverse the payment. Next, alert the FTC at ftc.gov so they can do their part in catching the criminals. Finally, you can let your local law enforcement agencies know about the scam and warn your friends and family about it as well.

Don’t get caught in an overpayment scam! Use this guide to stay safe.

Here’s what you need to know about one-time password scams and how to avoid them.

What is a one-time password scam?

One-time password (OTP) scams are designed to trick individuals into sharing their OTPs, which scammers then use to gain unauthorized access to accounts. Here are the various ways these scams go down:

• Phishing scams. Here, cybercriminals send fake emails or text messages that appear to be from legitimate sources, such as credit unions or banks, online retailers, or social media platforms. These messages often contain urgent requests to verify your account or resolve an issue, prompting you to enter your OTP on a fraudulent website.
• Vishing (voice phishing). In this scam, scammers call victims pretending to be from a reputable organization, such as a bank or government agency. They may claim suspicious activity on your account and request your OTP to secure your account, exploiting your trust and urgency.
• Man-in-the-middle attacks. In this method, attackers intercept communications between you and a legitimate service provider. When you request the OTP, an attacker captures it and uses it to gain access to your account.
• Social engineering. Scammers use psychological manipulation to trick you into revealing your OTP. They may impersonate friends, family, or colleagues, convincing you that sharing the OTP is necessary for a legitimate purpose.

Whichever method is deployed in an attempt to steal your OTP, the scammer will then use it to access your accounts and possibly steal your identity

Red flags

Avoid falling victim to a one-time password scam by watching out for these red flags:

1. Unexpected requests. Be cautious of unsolicited messages or calls asking for your OTP. Legitimate organizations typically won’t ask for your OTP unless you’re actively engaged in a transaction or login process.
2. Urgency and threats. Scammers often create a sense of urgency, claiming that immediate action is required to prevent account suspension or fraud. For example, a text message allegedly sent from your financial institution may claim you have 10 seconds to input the one-time password to verify your account. This tactic can make you act without thinking.
3. Unusual sender information. Check the sender’s email address or phone number carefully. Often, scammers use addresses or numbers that are slightly altered versions of legitimate ones.
4. Suspicious links. Hover over links in emails or messages to see the actual URL before clicking. Be wary of links that don’t match the official website of the organization they’re purportedly from.
5. Generic greetings and language. Scammers often use generic greetings like “Dear Customer” to send out mass emails. Their missives also tend to have spelling or grammatical errors. Legitimate communications are usually more personalized, professional, and proofread.

Protect yourself

Staying safe from OTP scams requires vigilance and adopting best practices for online security. Here are some steps you can take:

• Never share your OTP. Treat your OTP like your password — never share it with anyone, even if they claim to be from a trusted organization.
• Verify the source. If you receive a request for your OTP, verify the legitimacy of the request by contacting the organization directly using a known and trusted communication method.
• Use multi-factor authentication (MFA). Whenever possible, enable MFA on your accounts. MFA typically involves a combination of something you know (password) and something you have (OTP), providing an additional layer of security.
• Be wary of links. Avoid clicking on links in unsolicited emails or text messages. Instead, navigate to the organization’s official website directly through your browser.
• Install security software. Use antivirus and anti-malware software on your devices to help detect and prevent phishing and other cyber threats.
• Educate yourself and others. Stay informed about the latest scam tactics and share this knowledge with friends and family, especially those who may be less tech-savvy.

If you’ve been targeted

If you believe you’ve been scammed and/or have shared your OTP, take immediate action.

First, change the passwords on all affected accounts and those that have similar login credentials. Next, inform the host organization of the account that it’s been compromised. They can help secure your account and guide you on additional steps to take. Monitor your accounts in the ensuing weeks and months, keeping a close eye on your financial statements and account activity for any unauthorized transactions. Finally, file a report with your local consumer protection agency, the Federal Trade Commission (FTC), and the Internet Crime Complaint Center (IC3).

You may also want to consider identity theft protection at this time if sensitive information was compromised.

One-time password scams can be difficult to spot and wreak massive damage. Use this guide to learn about one-time password scams and how to prevent yourself from falling victim.

Stay safe!

What is spoofing? 

Spoofing is the criminal act of disguising a communication from an unknown source to appear as if it’s being sent from a trusted and known contact. The ultimate goal of spoofing is to get the target to share their sensitive information and/or their money with the scammer. For example, a spoofer may pretend to represent a victim’s credit card company and lead them into sharing their account details.

Types of spoofing

Cybercriminals have a variety of ways to pull off their spoofing. Here are the more common forms:

1. Email spoofing

In email spoofing, an attacker sends an email message appearing to be from a known or trusted source. The emails typically include links to harmful websites or attachments that will infect the victim’s device with malware. Alternatively, the scammer may use social engineering to persuade the recipient to share sensitive information.

2. IP spoofing

In IP spoofing, an attacker tries to gain access to a system by sending messages via a bogus or spoofed IP address, which appears to be from a recognized, trusted source, such as one on the same internal computer network. The spoofed IP address will mask the true source, which is a third party that is out to infect the victim’s device with malware and steal their information.

3. Caller ID spoofing

Here, attackers make a phone call to a target that appears to be from a known caller. The scammer will often pose as the victim’s bank or credit union. The victim, believing they are speaking with a representative of their financial institution, will disclose their account information and even passwords, which can lead to the scammer emptying their accounts and/or stealing their identity. Sometimes, the scammer will provide the victim with a phone number to call, which will allegedly connect them with their bank or credit union. This number, of course, will only connect the victim to a scammer.

4. Facial spoofing

In this most recent form of spoofing, a scammer uses a photo or video of a target’s face to simulate their facial biometrics. This enables them to unlock accounts that can only be opened via facial recognition.

5. Website spoofing

In website spoofing, a scammer will create a bogus site that looks just like a reputable website that the victim often visits. Attackers will lure victims to this site for the purpose of stealing their login credentials and personal information.

6. Text-message spoofing

In this scam, also known as smishing, a victim will receive a text message on their personal device appearing to have been sent via a trusted source, such as the victim’s financial institution, place of work, or doctor’s office. The text will ask the victim to share personal information. They’ll often do so, mistakenly believing the sender of the text message to be who they claim to be.

7. Man-in-the-Middle (MitM) attacks

There are three players involved in MitM attacks: the victim, the party the victim is attempting to communicate with, and the “man in the middle”, otherwise known as the scammer who is intercepting the communications. In these spoofs, the scammer tries to eavesdrop on the interaction between the victim and the other party. Alternatively, they may try to impersonate the other party to get at the victim’s personal information.

Deepfakes and spoofing

Deepfakes is a relatively new and dangerous tool for spoofers. A deepfake is a fake image, video, or audio clip that has been edited to appear authentic. For example, a scammer may create a deepfake video using an image and audio recording of a celebrity and make it appear as if they are telling you to open a link or support a specific cause.

Scammers use deepfakes to trap victims and appear as if they represent a trusted source.

Protect yourself

Spoofing is a formidable danger for consumers across the economic spectrum, but with the right tools and knowledge, you can avoid falling victim to these scams. Here’s how to protect yourself from a spoofing attack:

• Turn on your email’s spam filter and be sure to mark incoming emails that look suspicious as spam.
• Use two-factor authentication and/or biometric logins when possible.
• Use strong, unique passwords across all of your accounts.
• Ensure your device’s security system is at its strongest setting and uses the most updated patches. If you haven’t already done so, it’s worthwhile to invest in robust security software.
• Never click on links or open attachments that are sent from an unverified source.
• Never share personal information online or over the phone with an unknown contact.
• If you’re allegedly contacted by your financial institution and asked to provide your login credentials or account details to fix a supposed issue with your account, don’t respond. Instead, delete the message or abort the call and contact your bank or credit union directly to ask about any possible issues with your account.
• Don’t take phone calls at face value, even with caller ID. If you suspect foul play, Google the phone number presented on the caller ID to see if it’s associated with scams.
• Consider an app, like Hiya, that filters out known scammers, spoofers, and other nefarious numbers.
• Opt to display file extensions in Windows. This will enable you to view any spoofed extensions so you can avoid opening malicious files.
• Identify deepfakes by looking for small details that give them away. Zoom into the image or video to verify if the words and lip movements are in sync. Look for lip color that looks unnatural, unrealistic facial hair, exaggeratedly wrinkled or smooth skin, and non-existent moles.

Red flags

Look out for these red flags that can alert you to a possible spoofing attack:

• Websites with a URL that is very similar to the URL of a reputable site.
• Websites riddled with typos, unusual syntax, and spelling errors.
• An alleged rep of your bank or credit union asks you to call a number that is not associated with your financial institution.
• You’re asked to share your login credentials or account number with an unverified contact.
• Familiar corporate branding, such as logos, colors, and call-to-action buttons within a message asking you to take an action that is not typical.

If you’ve been targeted

If you believe you’ve shared sensitive information with a scammer through a spoofing attack, there are steps you can take to mitigate the damage.

First, contact your financial institution to let them know about the attack. You may place a credit alert or a credit freeze on your accounts, making it difficult or impossible for a scammer to open a line of credit or take out a loan in your name. If you believe your identity has been stolen, check out identitytheft.gov to learn what your next step should be. Finally, change the passwords on all your accounts to protect them from further attacks.

Spoofing has gotten a lot more dangerous in recent years, but with proper awareness and basic protective measures, you can avoid getting scammed. Use the tips outlined here to stay safe.