P2P fraud vs. P2P scams
The terms scam and fraud are often used to mean the same thing. But there’s a difference with p2p payments.
In general, fraud happens when someone accesses or uses your account without your permission. Scams happen if you were tricked, but you were still the one who approved a payment. Basically, fraud involves unauthorized transactions. Scams involve authorized transactions.
The difference is important because the same protections aren’t available if a transaction is authorized. That means there may not be much that can be done to get your money back. Even if it was a scam or a simple mistake.
Examples of P2P scams:
Beware of Fake Calls from Payment Services
- Scammers can spoof caller IDs to make it appear as though Venmo, Zelle, or Cash App is contacting you. They might claim there’s an issue with your account and ask for your authentication code, which they will use to gain unauthorized access to your account. Remember, legitimate companies are unlikely to call you and ask for such information over the phone.
- Tip: Always verify suspicious calls by contacting the payment service directly using official channels listed on their website or app.
Ignore Suspicious Texts and Emails
- Scammers may send texts or emails pretending to be from Venmo, Zelle, or Cash App, asking for your login information or directing you to click on a link. These links could lead to phishing sites designed to steal your information or install malware on your device.
- Tip: Never click on links in unsolicited texts or emails. Access your account by typing the URL directly into your browser or using the official app.
Watch Out for Urgent Payment Requests
- Fraudsters may impersonate companies or individuals, claiming you owe money and need to pay immediately via a P2P service. Legitimate companies rarely, if ever, demand payment through these platforms.
- Tip: If you receive an urgent payment request, take your time to verify the claims. Contact the company or individual directly using their official contact information before making any payments.
Seller Scams
- Seller scams may start with offers for tickets, marked-down merchandise, or anything else of value. A fraudster may place a false online ad for merchandise, and after you pay for the item through a P2P payment service, the fraudster keeps the money and never actually sends what you purchased.
- Tip: Always be cautious when purchasing items from unknown sellers. If something seems too good to be true, it probably is. Use P2P payment services only with people you trust.
Text Message Scams
- You might receive a text message regarding a recent charge on your debit card, asking you to verify the transaction. If you respond that you don’t recognize the charge, you could receive a phone call from what appears to be your financial institution's 800 number. The caller, claiming to be an employee, might request that you verify your account information, including your online credentials and a verification code sent to your phone. If you provide this information, the fraudster could use it to log in to your account and transfer funds using the linked P2P payment service.
- Tip: Never share your online credentials or verification codes with anyone over the phone. Contact your bank directly using the number on the back of your debit card if you suspect fraud.
Employment Scams
- In this scam, you're "hired" for a job and receive a fraudulent check from the so-called employer. They instruct you to deposit the check via mobile deposit and then transfer the funds using a P2P payment service. By the time the check bounces, the scammer has already taken the money, leaving you to cover the loss.
- Tip: Be wary of any job that asks you to handle large sums of money or make payments to others. Legitimate employers will never ask you to use your personal accounts for company business.
Be Cautious with "Accidental" Payments
- A scammer might send you money "by mistake" and then ask for it back. However, the payment was likely made using a stolen credit card or hacked account. When the original owner disputes the transaction, the platform will reverse the payment, leaving you out of pocket.
- Tip: If you receive an unexpected payment, do not send the money back. Contact the payment service's support team for guidance.
Apple Pay or Samsung Pay Activation Scams
- A scammer might send a text message or email asking you to activate Apple Pay or Samsung Pay using a code they provide. Once you give them the code, they gain access to your Apple Pay or Samsung Pay account, potentially using it for unauthorized transactions.
- Tip: Never share activation codes or verification codes with anyone. If you receive an unsolicited request, contact Apple or Samsung directly for assistance.
Confirm Payments Before Delivering Goods
- If you’re selling something, always verify that the money has been transferred to your account before handing over the item. Scammers may send fake screenshots or confirmation messages to trick you into thinking the payment was made.
- Tip: Check your account balance and transaction history in the app before completing any sales.
Be Skeptical of Upfront Payments for Jobs or Rentals
- Job and rental scams are common on P2P platforms. A fake employer or landlord may ask for upfront payments for expenses or deposits and then disappear with your money.
- Tip: Research the company or landlord thoroughly. Legitimate employers and landlords won’t ask for money via P2P services before a contract is signed.
Use Security Features
- All major P2P payment platforms offer security features to help protect your account, including multi-factor authentication and PIN codes.
- Tip: Enable multi-factor authentication and set up a PIN for added security. Regularly review your transaction history for any suspicious activity.
Examples of P2P fraud:
- Unauthorized electronic fund transfers: If money leaves your account and you weren’t the person to send it, it might be what’s known as an unauthorized electronic fund transfer. This fraud can be the result of a hacked account, a compromised card number, or a stolen device. Or it could be that someone accessed your account through a phishing scheme.
These kinds of transactions are usually not permitted with P2P payments:
- Pharmaceuticals and other controlled substances;
- Illegal drugs;
- Drug paraphernalia;
- Firearms, ammunition, or other weapons;
- Sexually oriented activities or materials;
- Pornography;
- Obscene or offensive activities or materials;
- Materials or activities that promote intolerance, violence, or hate;
- Ponzi or pyramid schemes;
- Illegal gambling, gaming, lotteries, or sweepstakes;
- Court-ordered alimony or child support payments;
- Traveler’s checks, money orders, equities, annuities, or currencies, including digital currencies, such as bitcoins;
- Counterfeit materials;
- Infringement on the copyright, patent, trademark, trade secret, or other intellectual property rights of Zelle®, a Network Financial Institution, another User or any other third party;
- Terrorist funding;
- Fraud;
- Scams;
- Money laundering; or
- Any other illegal activity or unlawful purpose.