Peer-to-peer payment services such as PayPal, Venmo, or Zelle are becoming the norm to pay a coworker for lunch or send money to a friend. However, scammers have found a way to use these apps by using variations on old schemes tailored to the new technology.
The Risks of Peer-to-Peer (P2P) Payment
Peer-to-peer payment services allow users to send money to each other from an app on their mobile device. These services use a linked bank account or credit or debit card. However, unlike more traditional banking systems, many payment apps will not shoulder the cost of fraud. This means that someone who paid scammers using one of these services may not be successful in getting the company to reimburse them for their losses to the fraud.
Better Business Bureau advises consumers to look out for the following scams when using peer-to-peer payment apps:
- Fraudulent payment methods. In one common scheme, scammers will connect a stolen credit card to a payment app. They then look for people selling big ticket items (such as a computer, tablet, or car) online. The scammers will offer to pay for the product using the app. Once the seller accepts the payment and sends the item, they’ll soon discover that the payment sent is not to a legitimate buyer, and the money is removed from his or her account. The seller is then without either the item or the money.
- Canceled payments. Some…
