Car sale overpayment scam: 'I sent too much, please refund'

Yes, treat it as a scam. Scamwatch lists a buyer who pays more than the agreed price and asks you to refund the overpayment as a warning sign of a buying and selling scam. With a car, the “difference” can run to thousands of dollars, and it comes out of your own money.

The trick works because the extra money looks real. It shows in your balance, or an email or screenshot says it’s on the way. Here’s why it isn’t yours to spend yet, and what to say when a buyer tells you “I sent too much”.

How does the overpayment scam work?

A “buyer” replies to your ad and agrees to your price quickly, often without haggling and without seeing the car. WA ScamNet’s warning about fake car buyers describes “buyers” who say they work somewhere remote with poor phone reception, want to deal only by email and will send a courier to collect.

Then the payment arrives, and it’s for more than you agreed. ScamNet’s page on overpayment scams describes what happens next. Before your bank has cleared the cheque, the scammer gets in touch with an excuse: the extra was meant to cover agent’s fees or shipping, or they made a mistake writing the cheque. They ask you to send the extra back by online transfer, a pre-loaded money card or a wire transfer service such as Western Union.

The fake-buyer version adds a twist. The buyer says they’ll pay for the car and the courier fees into your account together, then asks you to pay the courier on their behalf. In both versions, by the time the payment bounces or turns out never to have existed, the money you sent is gone. ScamNet is blunt about it: if you send any money, you won’t get it back, and if you’ve already handed over the item, you lose that too.

Why can’t you just refund the extra from what they sent?

Because the payment either isn’t money yet, never existed or was never the buyer’s to send. There are three ways this plays out.

The cheque hasn’t cleared. A deposited cheque can show in your balance before it has cleared. NAB, for example, credits a deposited cheque to your account straight away, but says it generally takes three working days to clear and that you normally can’t withdraw the money until it has. Other banks set their own timing, so ask yours. If you “refund” the extra before then, you’re spending your own money against a cheque that may never pay.

The payment never happened. An email “from PayPal” or “from the bank” saying the funds are on hold until you pay the courier proves nothing. Neither does a screenshot or an emailed receipt. WA ScamNet has warned car sellers about exactly these fake receipts, and its advice is to log in to your PayPal or bank account yourself and check the payment has arrived.

The money was never theirs. ANZ warns that the original payment in an overpayment scam can be made with a stolen credit card, so any “refund” you send goes straight to the scammer. ANZ suggests checking that the buyer’s details match the account or card the payment came from. Scamwatch lists an account name that doesn’t match the person you think you’re dealing with as a warning sign, so check the sender’s name before you do anything.

Bank cheques aren’t a shortcut either. Some sellers on Australian forums describe bank cheques being reported lost or stolen after they were handed over. Those are personal accounts, not published bank policy, but they’re reason enough to ask your bank whether a cheque has cleared. Our guide on whether a bank cheque is safe when selling a car goes into detail.

Which versions of the scam turn up in car sales?

The giveaway is always the same: more money than you asked for, then a request to send some of it somewhere.

If the buyer’s story leans on PayID, our guide to the PayID scam aimed at car sellers covers that version.

How do the numbers play out? A worked example

Here’s how a typical overpayment scam unfolds over a few days. The figures are made up to show the mechanics; they aren’t a price for any car.

Say you’ve listed your car privately for $30,000.

Every step looks reasonable on its own. The tell is the shape of it: a generous buyer, no inspection, a payment bigger than the price, then urgency to send money the other way.

What if the buyer really did pay too much by mistake?

Genuine typing mistakes happen. But a real buyer who overpaid has no reason to rush you, and the safe fix never involves money leaving your account before theirs has truly arrived.

1. Don’t send anything yet. Never send money to a different account, PayID, card or “agent”, whatever the reason given.
2. Call your own bank. Use the number on your card or in your app, not one the buyer gives you. Ask whether the payment has fully cleared, and check that the sender’s name on it matches the buyer.
3. Return extra only once it’s cleared, and only to where it came from. ANZ’s advice is to accept only the agreed amount, and to make sure a payment is genuine and fully processed before giving any refund.
4. If anything doesn’t line up, cancel the sale. Tell the buyer to raise their payment with their own bank. Moneysmart’s advice to anyone who finds something wrong with a transaction is to contact their bank as soon as possible.
5. Keep everything. Save the ad, messages, emails, receipts and the buyer’s phone number.

A short reply covers it: “I can only accept the agreed price. I’ll wait until my bank confirms your payment has cleared, then return any extra to the account it came from. The car stays here until then.” A genuine buyer has no reason to object. If the buyer goes quiet or turns up the pressure instead, you have your answer.

When is it safe to hand over the car?

Only when the full agreed price is in your account as cleared funds, from an account in the buyer’s name. WA Consumer Protection warns private sellers about scammers who fake a payment or promise to pay after taking the car. Its advice: make sure the money has transferred before you hand over the keys.

In practice, that means:

• Check your banking app yourself. An email, text or screenshot is not payment.
• For a cheque, wait until your bank says it has cleared, not just until it shows in your balance.
• Check that the sending name matches the buyer.
• Don’t sign transfer papers or hand over keys, the spare key or the logbook until then. The NSW Government and Consumer Affairs Victoria both tell sellers not to sign anything that transfers ownership until they’ve been paid.

If a buyer wants to hold the car first, a deposit is a part-payment that’s smaller than the price, never bigger, and the same clearing rules apply. Our guide to car sale deposits explains how a fair one works.

Which messages should make you stop?

Each of these lines matches a warning sign described by Scamwatch, WA ScamNet or ANZ.

• “I’ll take it at your price, no need to inspect”. Scamwatch lists a buyer happy to skip seeing an expensive item.
• “I’m working somewhere remote with bad reception, so we’ll have to do this by email”. ScamNet tells sellers to be suspicious of a buyer who only wants to deal by email.
• “I’ve sent extra to cover the transporter, please pay them for me”.
• “The payment is on hold until you pay the courier”.
• “Send the difference to this other account” or “split it across these PayIDs”.
• “It has to be today or the truck leaves without your car”. ANZ flags pressure for a quick refund before you can check the payment.
• A payment from an account name that doesn’t match the buyer’s.

One of these on its own might be innocent. Two or more together, alongside a payment bigger than the price, is the pattern. Stop replying, don’t send anything and call your bank.

You’ve already sent money. What now?

Move quickly, in this order.

1. Call your bank immediately. Scamwatch’s advice is to contact your bank straight away if you’ve been scammed. Tell them it was a scam payment and ask what they can do.
2. Call IDCARE on 1800 595 160 if you gave the buyer your licence, bank details or other ID.
3. Report it. Report the scam to Scamwatch. If you’ve lost money, also report it through ReportCyber at cyber.gov.au, which passes reports to police.
4. Keep the car. Don’t hand it over, even if the buyer promises the “real” payment is coming.
5. Keep your records. Screenshots of the ad, every message and every payment will help your bank and the police.

Our guide on what to do if you’ve been scammed selling your car covers the first hour in more detail.

How do you sell without taking that payment risk?

The overpayment scam only works because, in a private sale, money and a car move between strangers on trust. If you’d rather not carry that risk, you can sell to us. Sell Your Car Australia is run by a valuer who has priced cars since 1992, through Autohaus Australia Pty Ltd, a NSW licensed motor dealer (MD 077404). We make a genuine offer by phone. If you accept, we pay a deposit, often the same day, then inspect the car at a time and place that suits you. The balance is paid into your bank account, and the car is collected only after you confirm the funds have cleared.

We make our offer before we’ve seen the car, but we don’t buy it sight unseen: the inspection happens before the balance is paid, and you can check our licence before you agree to anything. We arrange collection anywhere in Australia ourselves, so there’s no transporter for you to pay, and no fees are taken out of the offer.

We buy cars, utes, SUVs and 4WDs that are 2021 or newer with 100,000 km or less. If yours is older or has more kilometres, send it through anyway and we’ll tell you straight away if we can help. Start with a free, no-obligation valuation, or call 1800 73 55 73.