Money Transfer App Fraud
Money transfer apps, also called peer-to-peer (P2P) payment apps, let you quickly and conveniently transfer funds from person to person or entity to entity without using a bank or credit card. Some apps specialize in bank-to-bank transfers, some work well for sending money to friends and family, and others facilitate international transfers. Common examples of these P2P apps are Popmoney, Venmo, PayPal, and Cash App.
Scammers will impersonate your app's customer service employees. These thieves will contact you by phone, text, or email. These bad actors want to trick you into disclosing your login details, hijack your account, and make purchases or transfer funds.
Remember, a legitimate customer service representative will never ask for your login, PIN, or other sensitive information, like your bank account information or social security number (SSN). Additionally, a legitimate customer service representative will never require you to send a payment, make a purchase, download any application for "remote access," or complete a "test" transaction.
Because the funds transfer quickly, you should only send payments to people you know and trust. Think of P2P apps like you're using cash—be cautious about where and how you send it.
Most of the time, you cannot cancel a payment once it has been sent, and you cannot recover the funds. If you send money to someone you don't know or you do not get what you expected, you likely will not get your money back.
While money transfer apps and cash are undoubtedly different, both provide the recipient with fast access to the money you send. With money transfer apps, funds move directly into the recipient's account within minutes. And again, once you authorize a payment to be sent, you cannot cancel it.
If an offer sounds too good to be true, it probably is. For example, a stranger selling online concert tickets at a steep discount and insisting you pay with a money transfer app may be a scam. Money transfer apps offer no protection for authorized payments that are scams, so play it safe. Only send money to people you know and trust.
Ensure you have the correct mobile phone number or email address for the person you want to send money to. When in doubt, contact your friend to double-check. If you authorize a payment to be sent to the wrong person, you may not get your money back.
Using your credit card may be a better option if you don't know someone or aren't sure you will get what you paid for. Unlike a credit card, money transfer apps may not offer protection if you authorize a payment but are dissatisfied with the purchase or service – for example, if you do not receive the item or the item is not as described or as you expected. Many credit card companies offer built-in buyer protections for cardholders. Check the terms and conditions of your credit card to see what's offered.
Learn more at BanksNeverAskThat.com, follow #BanksNeverAskThat on social media for quick tips, or speak with your trusted banking representative about steps you can take to protect your accounts.
If you believe you have been the victim of fraud, here’s how to report suspicious activity.