Peer-to-Peer (P2P) platforms, like Zelle, Venmo, and PayPal, have made life so much easier for many consumers. Paying your friend back for the $20 you borrowed is now as easy as a few quick seconds on your phone. However, these transactions happen so quickly that it’s tough to stop a fraudulent transfer or back out of an honest mistake. This makes P2P the perfect target for scammers.
4 P2P scams to beware of
1. Account Takeover – In this P2P scam, an alleged representative of a credit union or bank will reach out to a target via text, to confirm a recent large P2P transfer from their account. Once the target responds “no” the scammer will call the victim, and offer to assist them in reclaiming the allegedly lost money. The scammer requests the victim’s username to “verify their identity”. But instead, the scammer will use the victim’s user name to initiate the “forgot password” feature. The scammer now requests the one-time passcode and can now change the password to send themselves money.
2. Pay yourself scam – In this one, the scammer once again poses as an employee at a credit union or bank who sends a text disguised as a fraud warning and offers to stop the transaction. All you have to do is send a transfer to yourself using your own email or phone number. They claim they need the passcode to authorize the payment to yourself. But it actually enables the scammer to connect THEIR bank account with the P2P account using YOUR email or phone number. Now the money you thought you were sending to yourself goes directly to them.
3. Mystery money – In this P2P scam, a stranger “accidentally” sends the target money and then reaches out, asking for the money back. The target will see these funds in their P2P account and willingly return the funds. Unfortunately, though, this money was added to the target’s account using a stolen credit card or checking account, and the platform will ultimately flag the transaction as fraud and remove the funds. If the victim already forwarded the funds to the scammer, the platform will hold them accountable for the funds and potentially block their account.
4. Hidden credit card fraud – In this P2P scam, a fraudster will purchase an item listed on Craigslist or a similar site using a P2P service. They’ll pick up the item, or have it shipped to their home, and they’ll never be heard from again. Meanwhile, the P2P platform will eventually recognize that the funds for the purchase were fraudulently sourced and will take the money back from the seller. The victim will be left without the item – and have no money to show for it.
Stay safe from P2P scams
Follow these rules when using Peer-to-Peer platforms:
- Only send and accept funds from people you personally know and trust.
- Always confirm that you’re interacting with the correct person by verifying their phone number at every stage of the P2P transaction process.
- Accept any security updates to P2P apps to keep them up to date
- Choose to be notified about every transaction.
- After completing a P2P transaction, check your bank account to confirm you’ve actually received the promised funds.
P2P services are enormously convenient, but each transaction carries the risk of fraud. Use the tips outlined here to stay safe from P2P scams.
