Overpayment scam

A customer advertised stereo equipment for sale on the Internet and was contacted by an overseas purchaser in Amsterdam, who agreed to buy it for $1,600.

For payment, the purchaser suggested that his American client, who owed him money, pay the customer $7,800 and the customer could then wire the $6,200 difference to the purchaser. A Canadian business associate of the purchaser would pick up the stereo equipment. The customer agreed to this proposal and asked to be paid with a certified cheque.

The customer received a $7,800 cheque written on a Canadian bank account. Although the cheque was not certified as he had requested, he deposited it at an automated banking machine after business hours on a Friday.

When the customer called the bank to find out how long it would take for the cheque to clear, he was told that it generally takes five days, but to be safe he should wait seven days.

During the weekend, the purchaser called to tell the customer of a family tragedy that required his immediate travel to Hong Kong. He told the customer he would accept $5,800 instead of $6,200, as he urgently needed the funds for travel.

On Monday the customer called the bank to find out if the cheque had cleared. He was told that it had not cleared, but that he could access $3,000 now because of his history as a good customer of the bank.

The purchaser called again, pressuring the customer to help with his travel costs. The customer called the bank on Thursday and claims he was told that if the funds were in his account on Friday, then the cheque had cleared. On Friday morning the customer satisfied himself that the funds were in his account and he wired the purchaser $5,800.

Shortly afterwards, the $7,800 cheque was returned because it was a forgery. The bank offered to reimburse the customer $2,600 of his loss but the customer declined, demanding payment of $7,800.

OBSI:

Unfortunately, the customer was a victim of a common fraud scheme.

OBSI determined that a hold on the cheque for five business days would have expired at midnight on the Friday following its deposit. Not only did the customer not wait a full five days for the cheque to clear but, contrary to the original agreement for payment by certified cheque, he accepted an uncertified cheque from an unknown third party without attempting to verify the payment. In addition, the customer still had his stereo equipment.

OBSI found the bank's offer to reimburse the customer $2,600 to be reasonable. The bank renewed its offer and the customer accepted it.

(2004)