Fraud Alert: Banking & Payments Federation Ireland has issued the following Overpayment & Refund Fraud alert

Purpose of Advisory

A number of businesses in Ireland have recently been targeted by fraudsters posing as new customers. They order goods or services for which they make an overpayment and then seek a refund. The original order payment, usually a cheque or draft, later turns out to be bogus leaving the business with a loss.

Key Details

How Does the Scam Work?

The fraudster targets a legitimate seller of goods/services

They pose as a new customers, often based abroad, and make an initial order

Payment is generally made by a cheque or draft that is delivered directly to a bank branch (even if an electronic method of payment has been discussed)

The sum received is higher than the purchase price of the order

The seller then receives a request, usually be email, to return all or part of the monies electronically as quickly as possible

While the seller is pressured to return the money, the original cheque or draft, which is usually forged, counterfeit or fraudulently altered in some way, will be rejected and not paid – so the seller loses out

Red Flags

Businesses should be wary of the following

New customers and/or an unusually large orders

Customers who will only provide an email address for contact purposes

When the method of payment differs from what was previously discussed e.g. customer has been paid by means of cheque when an electronic transfer was agreed and expected

Buyers who make a payment above the quoted or invoiced price and ask for the overpayment to be returned electronically

Customers who put you under pressure to release goods/funds without undertaking essential checks


To Protect your Business from overpayment Scams

Always make sure you know that any funds paid into your account are irrevocable before making a refund

Always exercise caution when forming new relationships with potential customers, undertaking appropriate due diligence

Never feel pressured into making a refund until you are sure original funds are legitimate and secure

If you are concerned you have been targeted by an overpayment scam, immediately contact your Bank and report to the Gardaí / Police

This is a general notice issued by the Financial Crime and Security Department of BPFI on behalf of BPFI members.

Disclaimer Note: The information contained in this Fraud Alert /Advisory is for general guidance and for information purposes only and is intended to enhance awareness and vigilance regarding this fraud.

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