Scammers Abound on Peer-to-Peer (P2P) Payment Apps

By Teresa Holt and Ellie Kennedy, AARP Alaska

With the rising popularity of Peer-to-Peer (P2P) payment apps like PayPal, Venmo, Cash App, Zelle, Google Pay, and Apple Pay, it's crucial to protect yourself from fraud on these platforms. While these apps make transferring funds from one person to another quick and easy, they also increase the risk of scams. According to Forbes, P2P fraud losses reached an estimated $1.7 billion in 2022, and that number has only risen since. Transactions are instantaneous and usually irreversible, so knowing how to spot potential scams is essential.

Scammers impersonate friends or family asking you to send them funds through a P2P app. If the request is unexpected, check with the person via text or phone call before sending money. Scammers also impersonate trusted entities like banks or P2P platforms, claiming there is an issue with your account. Once you provide the information, they can access your account, make unauthorized transactions, or even lock you out. Legitimate institutions will never ask you to transfer money, make a reverse transfer or share sensitive information. If you receive such a call, hang up and contact the bank or company directly using contact information from a statement or their official website.

Scammers also create fake listings selling goods or services, asking for payment using P2P apps and then vanishing after you transfer the money, leaving you without the item you paid for. Beware of buying items online.

Another scam unfolds like this: you receive money unexpectedly in your P2P account. The sender claims it was a mistake and asks you to send it back. After you return the money, you discover the funds were from a stolen source or a fake account. If someone says they've accidentally transferred money to you, don't send it back. Contact the P2P platform to report the incident and let them handle it.

Here are some practical ways to stay safe while using a P2P app:

· Know the person you are sending money to. Do not send money to strangers.
· Do not rush when making payments. Double-check all the details before hitting send.
· Update your phone and P2P apps with the latest security features, including alerts regarding account activity.
· Use multi-factor authentication in addition to a username and password.
· Do not use P2P apps while on public wi-fi networks.
· Monitor your bank accounts and P2P apps regularly to check for suspicious activity.
· Think twice before allowing someone to use your phone. Instead of calling, they can access your P2P apps and transfer your money to their account. Instead, make the call for them and put the phone on speaker.

If you think you have been scammed:

1. Notify the P2P platform about the unauthorized transaction. If caught early, they might be able to reverse the payment.

2. Inform your bank about any unauthorized transaction.

3. Immediately update passwords for your P2P apps and any associated bank accounts.

4. Activate multifactor authentication on your accounts if you haven’t already.

5. Report the fraud to the Federal Trade Commission to help them identify and stop patterns of fraud.

6. Keep records of all communications related to the scam.

If you or someone you know has been targeted by a scam, you are not alone. Fraud specialists at the AARP Fraud Watch Network Helpline (877-908-3360; available from 4 a.m. to 4 p.m. Alaska time) can provide free support and guidance on what to do next. To learn more about fraud, scams, and prevention, visit the AARP Fraud Watch Network at www.aarp.org/fraud.

Remember: if you can spot a scam, you can stop a scam!