What is P2P, and how can I not fall victim to a P2P scam?
Online peer-to-peer, or P2P, are payment apps like CashApp, Venmo, Popmoney®, and Zelle® that allow you to simply and digitally send money to people immediately. I’ve used apps like these to collect money from a friend when I’ve paid at the drive-thru window at Krispy Kreme or to payback a coworker for picking up that afternoon coffee from Starbucks. While these apps are great and offer a convenient way to pay friends and retailers, they have also created another avenue for fraudsters to take advantage of consumers, especially during the pandemic. I’d like to offer a scenario for you to think about.
While searching on Marketplace, you find a NEW in the box iPhone 12 Max Pro for $500. It’s such a good deal so, in haste you message the seller “Sold!”. The seller asks you to pay through CashApp. Since you can see the seller has a Facebook account with a photo and positive reviews, you figure it must be legitimate, and you initiate the payment. When the iPhone arrives a few days later, not only is it not the iPhone 12 Max Pro, but it also has a cracked screen and is not the phone you saw in the listing. The seller will not respond to your messages and has blocked you on social media. This has never happened to you before; you reach out to your financial institution and inquire how to get your $500 back. That's when you learn there is not much you can do about getting a charge reversed once you have paid through a peer-to-peer payment service like CashApp, Popmoney, Venmo, or Zelle.
Here’s what you need to know about fraud with P2P payments:
- Only use P2P to pay an individual or business you are familiar with.
- Read the terms and conditons for the payment services you're using. Some offer reimbursement or protection plans, but not all of them.
- Be cautious when the transaction involves opportunities for you to make free money. Situations that involve depositing a check into your account and wiring a portion of the funds, or giving gift card numbers over the phone are red flags and signs of a scam.
- Don't leave your phone or other devices out for easy access. Safegaurd them with passwords to prevent fraudulent transactions.
- If you think you might be a victim of a scam, change your passwords immediately and call your credit union right away.
Protect yourself from fraudulent situations like these by staying up-to-date on the latest fraud trends and never hesitate to turn to your trustworthy SAFE family with any questions. We're here to help!