I was trying to sell an old laptop on Craigslist and got so confused trying to differentiate between legitimate and scam offers. For example, one guy from France offered to send me a money order and let me cash it before I sent out the computer, and was willing to pay more than I was asking. Another said he was happy to pay via Paypal if I just sent him my Paypal account ID. Were either of those legit? If not, how do the scams work?
This time of year is a great time for me to address this issue, actually, because there are a lot of people who decide to “regift” unwanted things through various online sales and auction sites and, well, there are a lot of scammers out there.
You were right to be skeptical. Both of the offers you got were fake.
The first and classic sign of a scam is that they don’t ask the kind of questions you would expect a buyer would want to know. In your case, a legit buyer might ask for additional photos or what software you’d be including, and just about all of them would want to use an escrow service (like escrow.com) to ensure that you aren’t going to rip them off by receiving the money and never shipping anything.
With the money order scam, a typical interaction has you going back and forth with the potential buyer and them saying “since I’m causing you hassle, I’m happy to pay you more than your asking price”, or perhaps offering extra for shipping overseas or similar. Why would they do that? To make you greedy and stop thinking clearly. I mean, really, what buyer who would be shopping on Craigslist offer *more* than your asking price?
Anyway, you agree on a price, they mail you a money order, you cash it at your bank and all appears to be well. But it’s not. The money order was counterfeit and the bank won’t learn that until 5-8 days later when the money order itself is rejected by the remote bank and your bank comes back – rather surprisingly – and tells you that it’s pulling the money back out of your account. If you’ve already shipping the goods, you’re completely out of luck.
The more sophisticated and easier version of this transaction involves Paypal, a convenient online payment service owned by eBay. Again, the buyer is happy to pay more than you’re asking or is happy to buy your used product without asking for any questions or suggesting an escrow service. You send along your Paypal account ID or even issue a payment request from within Paypal and a day or two later you get a payment notification from Paypal in your inbox.
All is well, right? Time to ship your product and consider it a transaction well completed.
But it’s not. The email from Paypal is a fake and no deposit of funds has taken place.
You can guess the outcome. You ship the product based on the email notification, you then log in to your Paypal account a few days later and are shocked to find that the deposit isn’t showing up! You contact Paypal and they tell you the bad news.
My friend Doyle Albee (of Boulder-based Metzger Associates) had a similar experience when he tried to sell his iPod on Craigslist: the potential buyer never asked a single question about the actual product and offered to pay via Paypal. When the buyer said he wanted to send the iPod to his wife in Africa, Doyle said he’d want an additional $200 for shipping and packing to Africa. The seller, incredibly, agreed and suggested Doyle issue a payment request from within the Paypal system.
Luckily for him, Doyle’s hip to these sort of scams and not only didn’t fall for it, but wrote about it on his blog, hoping to help others avoid the same ripoff.
In the end, selling your stuff online has the same rules of everything else: if it seems too good to e true, it is. Don’t be greedy, be smart.
Let this be your year to not fall for a single scam or con.
Thank you so much for this blog. I had received a text message this morning from someone “working on a contract out of state” that was only able to text due to bad cellular reception…his story sounded plausible, but it was still fishy as to why he’d be so quick to buy without haggling or asking for an escrow account (the item I was selling was $1500). He wants to pay via Paypal, and now I see why. I think I will wait for the next REAL buyer to come along. Thank you 🙂
Hi EveryBody, especially Mr. Dave
I would just like to thank you all in trying to help the masses around the globe without any profit.
Let me tell you that your information here was invaluable to me as I was about to fall to a similar kind of fraud.
Thank you once again.
Regards
Yasir Bin Riaz
I don’t agree….some might be scams …some not. I collect a certaing handbag that would cost 3 or 4 thousand dollars. I ALWAYS google the name of the bag and craigslist and of course they are always in other states.
While inter-state scams are common on CL, it is possible to come across Craigslist ads from another state when looking for a used item on google. It always pays to do your homework on the buyer (or seller).
I’d like to point out a couple of things:
99.9% of internet escrow sites are phony sites created to assist scammers. The other 0.1% is escrow.com. Escrow.com is the ONLY legitimate escrow site. I know that seems like an over-generalization, but I’m not kidding. New phony escrow sites are created every day. It’s a rather common variation of the Nigerian scam.
Another thing is specific to craigslist: Deal locally only. No honest person in another state or another country would see your ad; they would be shopping their own craigslist page. Only scammers try to initiate a long-distance transaction through craigslist. The only safe way to craigslist is to deal in person, in cash.