With the advent of payment apps like CashApp, Venmo, and Zelle, sending and receiving money is now quicker and easier than ever. Whether splitting a dinner bill, sending a friend money for concert tickets, or handling your portion of rent and utilities, peer-to-peer payment apps provide convenient payment with just a few taps.

However, with convenience sometimes comes risk. A new scam is making the rounds targeting users of these peer-to-peer payment apps. This scam involves sending “accidental” payments to unsuspecting users. It may seem harmless at first glance, and you may even think, “What’s so bad about someone accidentally sending me money?” But there’s much more to this scam lurking beneath the surface. It’s crucial to be aware of the latest scams and the dangers they pose so you know what to look out for and how to avoid them.

How Do Accidental Payment Scams Work?

One of the most popular peer-to-peer payment scams involves “accidental” payments. This scheme preys on the kindness and trust of unsuspecting users. Here’s a breakdown of how the scam typically works:

1.The Setup: A scammer gets their hands on stolen credit cards. Then, they use these cards to send money to random users on peer-to-peer payment apps.

2.The Request: The scammer contacts the recipient and claims they sent the payment by mistake. They might concoct some story about how they accidentally clicked the wrong person or mistyped a phone number. They plead with the target to return the money, stating they really need it. They might even spin another tall tale about their purported financial hardship, making up some scenario to tug at your heartstrings to show how desperate they are to get the funds back.

3.The Exchange: Naturally, the recipients tend to feel sympathy for the concocted situation. Most people will send the money back. That’s why this scam is so effective – it preys on people’s natural desire to do the right thing, especially when they’re led to believe it was an honest mistake and they’re helping someone in need.

4.The Outcome: If the recipient complies and returns the “accidental” payment, then they are out their own real money. Unbeknownst to them, the scammer’s original payment was made using stolen funds, so that money never belonged to the sender. Meanwhile, the “accidental” payment is reversed out of your account once the rightful owner of the stolen credit card reports the transaction as fraudulent. The payment app removes the original funds from the recipient's account, but the money they sent to the scammer is gone for good.

This is a particularly concerning ploy because once you’ve sent money through peer-to-peer payment apps, it’s incredibly difficult (if not impossible) to get it back – even if it turns out to be fraud. It’s important to remember that these apps manage the transaction process, not the legality of it all.

Why It’s Hard to Get Your Money Back

Unlike traditional bank transfers, payments made through peer-to-peer payment apps are instant and almost irreversible. These apps were designed to make sending money as quickly and easily as possible. But the downside is that there’s little to no recourse if something goes wrong.

If you send money to the wrong person or fall victim to a scam, there aren’t the same type of procedures in place as when you dispute charges on your credit card. There is no automatic protection provided or guarantee that you’ll get your money back.

Once you send money to someone, even if it’s a scammer, those funds are gone for good. The app is unable to reverse the transfer because you willingly made it rather than someone hacking into your account. Even if it was under false pretenses, you still initiated the transaction. This is why many credit unions and other financial institutions are limiting the amount of money you can send through these apps to help mitigate the risk of fraud.

Tips to Stay Safe

As with any scam, there are still plenty of basic safety measures you can take to protect yourself. Follow these tips to keep yourself safe from falling victim to this and other payment app scams:

• Ignore Payments & Requests from Strangers: If you receive a payment or a payment request from a stranger, do not respond. If you receive a payment from someone you don’t know, ignore the payment and do not deposit these funds into your savings or checking account. This scheme relies entirely on you engaging with the scammer, so if you don’t react in any way, their scam falls apart.
• Only Send Money to People You Know: These apps are only intended for use between friends, family, and known service providers (like your lawn care provider, for example). In other words, only people you know and trust – not strangers. Avoid using payment apps for transactions with strangers or people you’ve only interacted with online. Think of these apps like cash – once it’s gone, it’s gone.
• Report Suspicious Activity Immediately: Most apps allow you to flag the transaction if you receive an unexpected payment or request. Reporting suspicious activity or accounts will help protect other users from falling victim to the same scheme.
• Double-Check Before You Send: Always confirm the recipient’s information before sending anyone money. If you’re ever unsure, it’s always best to hold off and verify their information rather than sending funds prematurely and regretting it later.

We’re Here to Help!

As more and more people turn to payment apps to perform their everyday transactions, it’s essential to remain vigilant and aware of potential scams. By understanding how these scams work, knowing the red flags to look out for, and taking steps to protect yourself, you can enjoy the convenience afforded by these apps without falling prey to fraud.

If you suspect you were targeted by a scam or have been a victim of fraud, contact us immediately. Our team is here to support and guide you through any issues or concerns. Please contact us today to speak with a team member.