Individuals and businesses alike should exercise caution when wiring money to strangers. Many scams use this irreversible, virtually untraceable method to trick victims out of their money.
Overpayment scams often target people selling items through online classifieds. Scammers will agree to purchase the item and send a cashier's check for several thousand dollars above the agreed-upon price. When the seller contacts the buyer about the error, the buyer will claim they sent the wrong check, and instruct the seller to simply cash the check and wire back the difference. Eventually, the seller finds out the check was counterfeit and that the money they wired is long gone.
Businesses can also fall victim to overpayment scams. In these cases, the scammer will request the services of the business and, once again, send payment in advance for thousands over the actual cost.
Sending money via wire transfer service is convenient, but it's important to use caution at all times. In general, wiring money to a stranger is extremely risky, and in EVERY case, if a stranger is asking you to cash a check and wire the funds back to them, it's a sure sign that something isn't right.
Visit fraudpreventionunit.org for more information on this and other types of fraud.