Popular peer-to-peer (P2P) payment apps, such as Venmo, Cash App, PayPal and Zelle^®, are convenient targets for scammers. Most transactions through these payment services aren’t protected by the comprehensive liability guarantees that consumers expect from their credit cards and financial institutions. Usually, once your money is gone from these apps, it’s gone for good.

Common payment scams to avoid

In most P2P payment scams, fraudsters add money to their accounts using fraudulent sources, such as stolen credit or debit cards, then use that money to conduct transactions. The funds eventually get flagged as fraudulent by the P2P provider, but by then, the scammer is long gone with cash or merchandise. Here are some of the most common P2P scams to watch out for:

1. Mystery money
   In this scam, a stranger “accidentally” sends you money through a P2P app, then asks you to send the money back. Once you do, they cash out and disappear. When the P2P provider flags the transaction as fraudulent, you’re left on the hook to return the funds. Plus, the provider might think you’re complicit in the fraud and block your account.
2. Dishonest buyer
   Let’s say you’ve listed an item for private sale through Facebook or craigslist. The scammer pays you using Venmo, Cash App, Zelle or a similar app and picks up the item or asks you to ship it somewhere. Soon after, the P2P provider identifies the funds as fraudulent, leaving you responsible for the amount — and without the item you sold.
3. Work-from-home scam
   You get hired for a remote job you applied for through a popular job search website, and your new employer sends you a check for some reason, such as setting up your direct deposit or paying for new computer equipment. They then ask you to forward some of the money to someone else using a P2P app for another legitimate-sounding reason. But here’s the catch: the check was fake all along. Once it bounces, you’ll be liable for the full amount, leaving you out of both money and the supposed job.
4. Fake business transaction
   Some scammers pretend to be a legitimate businesses and request a P2P payment for a product or service. But after a scammer has your money, the product never arrives and the scammer disappears.
5. Imposter fraud
   Scammers pose as a representatives from fraud departments or well-known merchants and ask you to verify sensitive information, such as your bank login, credit card details or Social Security number. Sharing this information with them allows the scammer to set up a P2P account in your name, steal your identity and gain access to your financial accounts.

Even worse, in addition to stealing your money, items or personal information, some of these payment scams use you as a money mule, a growing type of illegal activity. Learn more about money mule scams.

How to stay safer when using P2P apps

P2P payment apps are convenient for sending money to friends, but they can be risky when transacting with strangers. Keep these tips in mind for using payment apps more safely:

• Send or receive money from people only if you know them personally.
• Always verify that you’re transacting with the correct person by double-checking their phone number since scammers can easily impersonate others by changing their name and photo.
• Be cautious about accepting funds from strangers.
• Avoid sending money for a purchase until you’ve received what you paid for, or only use a P2P service that offers a purchase protection option.
• Contact the P2P service’s customer support directly if you’ve received an unexpected payment. Don’t send money back to strangers, as this could be part of a scam.

When in doubt, use credit cards with zero liability purchase protection, such as Grow Visa^® credit cards, which are safer payment methods for online transactions.

Want to learn more about avoiding scams? Visit our Education page and sort by Security Education to find more security-related topics.

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