Hearing someone say, "I’ll Venmo® you" is quite common in today’s environment where speed and convenience are the norms. Peer-to-peer or person-to-person (P2P) payment apps like Venmo, Cash App®, Google Pay®, PayPal® and Zelle® allow you to pay a friend or merchant with a single swipe or click of a button for a variety of services through a quick transfer of funds. While P2P services are simple and generally safe to use, criminals have, unfortunately, figured out how to leverage their speed and widespread popularity to steal your money – sometimes without the ability for you to get it back.

It is important to note the difference between a P2P scam and fraud, as the actions you take may impact your ability to recover your money. If a fraudster hacks into your account without your knowledge and transfers funds to their account, you will likely receive protection as it was an unauthorized action. But if a scammer tricks you into sending them money using a P2P payment service, you may not receive reimbursement for losses from your financial institution because you authorized the payment. Simply put: fraud involves unauthorized transactions; scams involve authorized transactions.

In the past, the go-to request used by scammers to take money from their victims was to be paid through gift cards. Today, P2P apps are the new gift card tactic to take advantage of unsuspecting individuals. Whether you’re purchasing or selling through P2P payment services, it is important to be aware of common scams and fraud that can jeopardize your money, including:

  • Impersonating your financial institution, a fraud department, merchant or legitimate business requesting a P2P payment or information, including your account login ID or password, Social Security number (SSN), secure access code, card data or a micro deposit1 into your account. An unknown person from your "financial institution" may call or text you using a spoofed number (appearing to be your financial institution’s phone number) warning of suspicious activity on your account and recommend payment using a P2P app to ensure your account is not frozen.

    If given personal information, criminals may create a P2P account under your name, access your other accounts and steal your identity. Never share this information with anyone. P2P payments should be treated like sending cash: once it’s gone, it’s gone. If you are paying for a product or service, remember to only pay once you receive it.

  • Funds being sent from your account without your knowledge, known as unauthorized electronic fund transfers. This could be due to a lost device, stolen card or hacked account. Be sure to change your passwords immediately and contact your financial institution’s fraud department.

  • Requesting to deposit a check, then sending part or all of the funds through P2P. This scam can come in many forms, one of which is a new work-from-home position for a company, which is not legitimate. If you do deposit the check into your account, it will often bounce and leave you with nothing to send through P2P but your own funds. If the check does not bounce, the money may be stolen or a cover for illegal activity. Do not deposit any checks unless you are sure of their origin.

  • Asking to return an "accidental payment" on a P2P service. If you send the money back, the P2P service could hold you responsible for stolen funds once they flag the scammer’s account as fraud. Instead of sending back the funds, inform the P2P service directly of the error.

  • Pleading to use your mobile phone for an "emergency." Once you hand over your phone, they could transfer your funds to their account(s) using your payment apps. Be careful of handing your phone over to someone you do not know.

  • Masquerading as a legitimate company to sell you "merchandise." The "merchant" advises payment through a P2P service is the fastest and easiest way to complete the transaction. Upon authorizing the transaction and sending the payment, the merchandise never arrives and the scammers have stolen your funds.

Now that you know what to look out for to keep your money safe from scams and fraud, follow the tips below to remain safe no matter what P2P method you’re using:

  • Only send funds to individuals you know and trust, and verify you are sending money to the correct account by verifying the recipient’s contact information.
  • Never send money as a result of an unexpected call or text.
  • Don’t be rushed into paying someone – this could be a warning sign of a scam.
  • Never provide your secure access code or one-time passcode to anyone.
  • Set up multifactor or two-factor authentication within your P2P apps for more security.
  • Enable fraud alerts from your financial institution. Learn about APGFCU alerts.
  • Don’t trust caller IDs – they can be easily spoofed.
  • Always use a strong, unique password for each account.
  • If you get a call from your financial institution with an odd request, hang up and call them back at their published number.
  • Don’t click on links in unsolicited emails or texts, or give an unsolicited caller remote access to your device, as this could potentially install malware or infect your device.
  • Avoid sharing personal details on social media and only accept requests from those you know.
  • Refrain from connecting to public Wi-Fi.
  • Remember: APGFCU will NEVER call or text you to request information or pressure you to reset your online banking login.

If you are a victim of a P2P payment scam or fraud, be sure to notify your financial institution immediately. Receiving protection and refunds may be dependent on whether or not you authorized the transaction. You can also report the incident to your local police department, the Federal Trade Commission online or by phone at 1-877-FTC-HELP (382-4357), as well as the Federal Bureau of Investigation.

1A micro deposit is a small deposit, typically less than a dollar, made to your account used to verify ownership of your account. Micro deposits are often used when setting up transfers between your accounts through online banking. To confirm ownership of the account held at another financial institution, a micro deposit is made to that account and then confirmation of the amount is required behind the online banking system.