How to Recognize and Avoid Payment App Scams
Popular payment apps, like Zelle, Venmo, PayPal, and Cash App, can be a convenient way to send and receive money from people or businesses that you know. However, the rise in popularity of these apps has come with a risk for fraud. Payment app transactions are usually instant, and if sent to the wrong person or to a scammer, the money may not be recoverable.
Beware of payment app scams that criminals use to steal money.
- “Accidental” transfers: A scammer using a stolen credit card or hacked account sends money to a victim on a payment app, claims it was accidental, and asks for the money to be returned. Victims should never accept or return such payments. Instead, they should contact the app's customer support right away to report the unexpected payment. If the victim returns the money to the scammer, the payment app will eventually reverse the initial fraudulent payment. The victim will then be out of pocket for the amount they sent, as the original funds will be withdrawn from their account.
- Bank imposters: Scammers contact a victim via text or phone call pretending to be from their bank, claiming there’s been “suspicious activity” on their account. The scammer may direct the victim to reverse a transaction or verify an account is not frozen by sending money to another account that is controlled by the scammer. They may also claim there is an internal investigation and prompt the client not to discuss their money movement activity with the branch. Remember: Banks will never ask a client to verify an account is active by sending money to the bank or someone else.
- Business imposters: Scammers pose as legitimate businesses, create fake invoices, and request payment for a product or service through a payment app. If the victim makes the payment, the scammer will receive the money, and the victim will never receive the product or service they thought they were purchasing. To avoid falling victim to this scam, it’s important to validate that invoices represent legitimate purchases before paying them.
- Fake charities: Scammers ask victims to use a payment app to make donations to a fake charity. To avoid falling victim to this scam, confirm through the charity’s website that the charity accepts donations through the payment app and that the account details are correct.
- Spoofed emails: Scammers send a spoofed email warning a victim that their payment app account is about to be suspended. The email directs victims to a spoofed webpage and claims that the victim must enter their login information for verification. Exercise extreme caution when clicking links in emails. It is always safer to sign in directly on the payment app.
Ways to help protect your account when using a payment app
- Alerts: Set up notifications in each payment app, so you’re alerted whenever a transaction is made.
- Strong authentication: Protect your account by using a strong password and multi-factor authentication to log in. And, never share your account login information with anyone.
- Double check identities: Never accept money from or send money to someone you don’t know. And, before you send a payment, double check the recipient’s information to make sure you’re sending money to the right person.
- Confirm surprise payments: If someone you know sends you an unexpected payment, contact them directly before accepting it to confirm it’s from them and not the result of a hacker who has gained access to their account.
- Read app fraud policies: For each payment app you use, review fraud protection policies and understand whether it’s possible to recover funds in case of fraud, and what steps to take to do so.
Remember: Scammers thrive on urgency and secrecy. If someone insists you pay quickly in an unusual way, it's almost certainly a scam. Slow down, verify the request independently, and report suspicious activity to help protect yourself and others.