We’ve all been there, out to dinner with a group of people when the single check arrives. Only a few years ago, this would mean a collective search for wallets as the bill is divvied up and cash is placed in the center. Now, this typically entails a collective reach for phones as people fire up their mobile payment apps and split the check electronically. For many, this convenience has been a blessing, including scammers. Peer-to-peer (P2P) payment scams have become all the rage and it’s up to you to protect yourself.
What are P2P scams?
P2P scams come in a variety of forms. From purchased items that never arrived to a hacked account sending payments and draining users’ accounts, P2P scams come in all shapes and sizes. The one common trait is that all P2P scams involve payment methods like Paypal®, Venmo, Zelle®, Cash App, and more. These apps offer convenient and quick transactions, which are in many ways a fraudster’s paradise. The groundbreaking nature of these technologies also means that combating this fraud can be difficult for both the users and the app makers.
Luckily, the best remedy to fraud is prevention, and the best tool for prevention is knowledge. With that in mind, here are some tips for protecting yourself from P2P scams.
Keep notifications on
This can be annoying, but notifications, such as eAlerts, will provide the earliest notice that money has been sent or received. The earlier you can catch a scam, the less financial loss you’ll likely suffer and the better chance you’ll have of recovering your funds.
Read the terms of service
It’s important to understand the terms of service for every P2P app you use. Some companies (like Venmo) prohibit such things as commercial use (i.e. buying and selling goods). Knowing the terms of service allows for proper use of an app. Using an app properly means a higher chance of recovering funds in cases of fraud.
Know who you’re dealing with
If you’re engaging in a transaction with someone, make sure you can trust them. This is especially true when buying and selling online. If you are unsure, then it may be worthwhile to use something like Paypal®’s buyer protection, which charges a small fee to the seller in exchange for the buyer’s ability to fight a charge in cases where the item isn’t received, etc. If that’s out of the question, then it may be advisable to find an alternate payment agreement or just skip the transaction entirely.
Be careful when giving out app information
Once something is online, it’s there forever, even if you delete it on your end. So be cautious when giving out any sort of account or app-related information online. You never know where it may end up.
Don’t give too much information to the apps
Many of these apps allow you to pay using a variety of methods that you link to your payment account, including debit cards, credit cards, and accounts you have with a financial institution. It’s advisable to limit yourself to just one of these. Having multiple payment methods on a single account can make you a more lucrative target for fraudsters.
Don’t leave money in your payment account
If you’ve got money left in your payment account, it’s advisable to either spend it or transfer it to an account that you have with a financial institution. Money left in your account is easy pickings for fraudsters, so keeping it somewhere safe is important. Unlike with a financial institution, money left with these apps is uninsured, which means it can be far more difficult to recover.
For more information on P2P scams, check out:
To learn more about the people using P2P apps, check out: