The FTC describes how scammers engineer “overpayment” scenarios and pressure childcare providers to refund quickly. Even when the check looks like it cleared, the payment can later bounce, making the refund the provider’s loss.

A new FTC alert highlights a fraud tactic that targets childcare providers by combining impersonation, payment deception, and forced refunds. In the scam’s playbook, a fraudster claims to be a parent and sends what appears to be an advance payment or an overpayment by check. The provider may see the funds as available or “cleared,” prompting them to return money—often in response to claims that an amount was paid incorrectly. The critical step is the refund method. The FTC says scammers commonly demand that providers send refunds through wire transfers or payment applications, which can move money before the provider realizes the original check will not actually settle. When the check later bounces, the provider is left responsible for the returned amount and any additional losses tied to the transaction. The scam leverages urgency and authority: messages often cite time-sensitive enrollment or immediate needs to prevent verification. Scammers also try to keep communication focused on refunding rather than confirming payment status using robust, independent methods. For providers, the takeaway is to avoid releasing funds or issuing refunds based on check “availability” alone and to treat unexpected overpayments as a major red flag until payment is verified as fully settled.