Avoiding Payment App Transfer and Request Scams

October 6, 2021 | Financial Literacy from the Maine Credit Union League

(From the Financial Literacy Blog) – Mobile payment apps are becoming increasingly popular across all demographics. The apps provide a quick way to send or receive money and are linked to either a card or financial institution account. While mobile payment apps can be used as an alternative to credit or debit cards, many apps like Venmo, Zelle, or Cash App are used to send money to friends or family members. With the increase in popularity among peers, fraudsters are taking advantage by targeting users with transfer and request scams. Here is what to watch out for:

An “Accidental” Transfer

In this scam attempt, a fraudster will send you a message on your mobile payment app. It will read something along the lines of, “Uh-oh! I didn’t mean to send you that. Can you please send the money back?” After checking your account, you’ll see that you now have money you weren’t expecting––maybe even thousands of dollars. They surely made a mistake and meant to send the money to someone else, right? Wrong. The scammer likely sent you the money using a stolen credit card. After sending, they remove the stolen card’s information from the mobile payment app and link their own card details or account information to it instead. When you send the money back, the scammer immediately withdraws the funds.

In the meantime, the victim whose credit card details were stolen contacts their provider. After the card is blocked and charges are reversed, the money is removed from your account. This means you sent away potentially thousands of dollars and the money you thought you now had is gone.

If you receive a message from someone who claims to have sent you money accidentally, contact the mobile payment app’s support team. Explain that you received money you didn’t request and that you’re concerned about fraud. Instead of engaging with the sender, let the app’s support team handle the situation.

An Unexpected Request

Much like an unexpected transfer, unexpected requests can be something to watch out for. Fraudsters sometimes use the tactic of impersonating a friend of family member to request payments. They will create a profile using the photo of someone close to you. Additionally, they will create a username very similar to that of the person they’re spoofing––often by simply adding a number or removing a letter. At a quick glance, the profiles can be very convincing. The request may be accompanied with a message offering an explanation. For example, it could read, “Ugh, my job messed up payroll and I need to pay rent! Can you cover me? I’ll pay you back after I get my paycheck.” Because of the convincing profile and your willingness to help, maybe you send the money over. After doing that, the scammer immediately withdraws the funds and deletes the profile. Unfortunately, you may not be able to get that money back. You can report the charge to the mobile payment app’s support team, but there is no guarantee you will be refunded for falling victim to fraud while using their service.

If someone you know (or think you know) sends you a money request on a mobile payment app, call or text them to confirm their request. If you can’t get in contact with them, go to their profile to view their transaction history and information. That information may help you spot anything suspicious. To be safe though, simply wait until you’re able to connect with them before sending any money.

Being aware of common mobile payment app scams is one of the best ways to avoid them. It’s anticipated that these apps will continue to play a prominent role in the payment space, so it’s important to stay up-to-date on popular fraud tactics to protect your finances. The Federal Trade Commission maintains a list of scams and how to avoid them.