Pay back your best friend for lunch? Easy.
Transfer money to your sister for your parent’s anniversary gift? Easy-peasy.
Unsuspectingly transfer money to a scammer. Yes, all too easy.
Peer-to-peer (P2P) apps, such as Zelle, PayPal, Venmo, and Square have increased in popularity and earned a spot as an efficient means of transferring money quickly to other parties. This method of transferring funds is not only a plus for consumers, but fraudsters as well who are always on the prowl for new ways of scamming their victims.
Unfortunately for consumers, P2P apps provide another channel for them to try their tactics. One of the main perks of using these apps is that money is transferred quickly. In many cases, immediately. Often times, very little information (such as a phone number and email address) is all that is needed to complete a transfer. Falling victim to scams where a P2P transfer takes place is also costly for the victim, who is often left responsible for the loss, since the transaction was completed (therefore, authorized) by them.
What Types of Scams are Used?
The scams that are targeting consumers using P2P channels are similar in nature to the tried and true ones of the past. Fraudsters will pretend to sell some good or service and instead of requesting a wire transfer or a money order to complete the purchase, the victim will be asked to send money via P2P. Once the fraudster collects the money, they are then unreachable and the good or service is never delivered.
How To Avoid Becoming a Victim
The basis for many of these apps is the convenience of transferring money between those you know and trust. For many of us, that would typically be our family and close circle of friends. The best way to avoid being scammed through this channel is to only transfer money to those you know.
What To Do If You’ve Been Scammed
Contact your financial institution as well as the P2P service you transferred money through as soon as you learn of the scam. While there’s no guarantee a refund will take place for the lost funds, an investigation will begin to determine if any recourse is possible.
While P2P services can be great for transferring money quickly to family and friends, it’s important to recognize that no channel is safe from fraudsters looking to get a piece of your hard-earned cash.