How it works:
Someone advertises his cell phone for sale on the some online market places like Kijiji and Facebook. The seller gets a message from a person interested in the product. The questions could be very legitimate such as: what is your last price, if the phone has scratches on it, if it still has warranty and also if you could send more pictures of the product.
The seller will answer the questions, and then recieve another question regarding how much the shipping would be to a particular location (address provided). Again, this is a very legitimate question. The seller would provide the buyer with the answer, and they will acknowledge that they want to buy the product and will pay the agreed price plus the shipping fees.
Next the “buyer” will ask the seller to send a PayPal invoice request to their e-mail address. The first thing that is suspicious is when they want to pay after receiving the merchandise, even if the “buyer” suggested to use PayPal which protects both the seller and the buyer. However the scam is that the seller receives an email from Paypal stating that the payment has been received and will be kept by PayPal until it is confirmed that the buyer receives of the product.
- First step is that someone who has a Paypal account sends an electronic invoice to someone who has or does not have a PayPal account (the message would be send to the person’s email address and from there the recipient will set up a PayPal account to where the payment will be made). A PayPal account is connected to a chequing, savings or credit card account.
- After the seller sends the request from his PayPal account to their email address, the status in his PayPal account regarding that transaction will be pending (as normal), which does not mean the money has been transferred to his bank accounts.
- Please note: it is always safer to link your VISA/Mastercard/credit card to the PayPal account because if someone takes money from the Credit Card that person has more protection, but this is not the case for a chequing or savings account.
After the seller receives an e-mail back from PayPal confirming that the invoice has been received and the money has been transferred to seller’s PayPal account, they will still require the shipment of the product in order for them to release the payment.
But such a protocol does not exist with Paypal! Sellers should never ship the product until they have received the confirmation of the money being transferred to their bank account or credit card affiliated with PayPal.
- the seller receives a payment confirmation message, but it is actually coming from a fake PayPal website (which looks identical to the real one). The goal is for the “buyer” to scam the seller into shipping the product without paying anything for it.
- the PayPal confirmation message is fake, and even if redirected to a PayPal website it is most likely a clone website; the messages received from the fake PayPal email address usually uses an email address such as: firstname.lastname@example.org, or similar.
- the fake PayPal message will address the buyer with: “Dear…..following the email address of the buyer” instead his/her real name, when it is a legitimate PayPal message it will always address the buyer by his/her complete name. The fake Paypal does not know the buyer’s full name but just the email address which it will use it for correspondence when the legitimate PayPal representatives know the buyer’s full name and personal details as having set up an account with them;
- the “buyer” provides a real address where someone else, who is likely paid a small commission, will pick up the product and deliver it to the scammer. Or they could have set up a mail-forward service, which means that all the mail received at that address will be forwarded to another address which will be a post box, without any identification.
How could you prevent this scam?
- This is a new scam and if you have any doubt about a transaction, look at the details closely, read, use your common sense and ultimately double check with the legitimate provider of the services even if you have to pay for a long distance call. It is cheaper than losing a significant amount of money by shipping your product and never receiving payment for it.
- As mentioned above, it is safer to link your VISA/Mastercard/creditcard to your PayPal account because if someone takes money from your Credit Card you have more protection, but this is not the case for a chequing or savings account.
You may also contact E-crime Expert, if you have doubts and I could check whether a particular transaction is legitimate or not.