Avoid Peer-to-Peer Payment Scams on Paypal, Zelle, Venmo, and Others

Peer-to-peer payment services such as PayPal, Venmo, or Zelle become more popular each year. They come in handy when you need to pay a coworker for lunch or send money to a friend. But scammers have been targeting these apps, using variations on old schemes tailored to the new technology.

The Risks of Peer-to-Peer 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.

BBB 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 a payment app. They then look for people selling big-ticket items (such as a computer, tablet, or car) on Craigslist or another online service. The scammers will offer to pay for the product using the app. The seller accepts the payment and sends the item, but soon discovers that the payment sent is not legitimate, and the money is removed from his or her account. The seller is then without either the item or the money.


  • Canceled payments. Some digital wallet apps take several days to process a transaction. Scammers take advantage of this by setting up transactions and canceling them before they go through. By the time victims realize they’ve never received the money, the scammers are long gone.
  • You have been paid too much. Fraudsters may try to convince you that you’ve been paid more than you were owed. For example, a spoofed email says that you’ve been paid $3,000 for a camera you listed at $300! The sender asks you to ship the camera in addition to the extra $2,700 you were “paid” by mistake. In this example, the scammer wants your camera AND your money. In another version of this scheme, scammers overpay for items with a stolen credit card.
  • Fake official emails. Many fraudsters send spoofed emails warning that an account is about to be suspended and that the account holder must enter their password in a spoofed webpage. Generally, payment app vendors will never ask you to enter your password unless you are on the login page.

Protect yourself when paying with a money transfer app by following this advice:

  • Use money transfer with friends: Protect yourself from scams by only using money transfer apps for their intended purpose — sending money to people you personally know.
  • Enable additional security settings: Check your account settings to see if you can turn on additional security measures, such as multi-factor authentication, requiring a PIN, or using fingerprint recognition like Touch ID.
  • Link your money transfer app to a credit card. As with many other purchases, using a credit card will help protect you if you don’t get the goods or services you paid for. Linking to a debit card or directly to your bank account does not give you that added protection.
  • Use a password on your phone. If you lose your phone – or it’s stolen – be sure criminals can’t access your payment apps. Secure your phone by choosing a strong password or using the biometric security devices available on many smartphones.
  • Check your account to be sure that the money transferred: If you do use a peer-to-peer payment app to sell something, be aware that it takes a few days for some payments to transfer. Be sure that the money transfers before you send the goods. If you have any concerns that a payer didn’t really send the money, be sure to check your account directly.

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