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Peer-to-Peer (P2P) Payment Scams

More and more people are using mobile payment apps like Zelle®, Venmo® or CashApp®. P2P payments can make splitting the bill or paying for a service simple and convenient, but vigilance is key.

How P2P Scams Work

You’ve been looking for a beach-front property to rent over the holiday weekend to no avail. Then, you see a post on a social media page advertising your family’s dream rental. You want to snag it before someone else does, so you strike up an email correspondence with the owner and send over the down payment requested via a P2P app. After that, all communication ceases and you’re left with no vacation rental or way to retrieve your money.

1

Fraudsters like utilizing P2P apps in their scams because the transactions are often instantaneous and irreversible.

2

P2P apps are designed for users who know and trust each other—and those are the only circumstances under which you should use them.

Action Steps to Prevent P2P Scams

If you’ve fallen for a P2P Scam, there’s a good chance that your funds are lost for good, but it’s still important to respond quickly to limit damage and help others from being similarly targeted.

  1. 1
    Contact Your Financial Institution

    Immediately contact the P2P app or your financial institution to explain that the transaction was fraudulent and seek assistance with retrieval.

  2. 2
    Report Your Situation

    If you do not receive the support you need, contact the Consumer Financial Protection Bureau at consumerfinance.gov and file a complaint.

Tips and Best Practices

P2P payment scams are getting more advance and tricky to distinguish. Here are some tips and best practices to help avoid these types of scams.

DO

Do read the fine print of the app’s terms and conditions. Review their fraud protection policies and how they will help you recover payments if something goes wrong.

DON’T

Don't send or accept P2P payments from someone you don’t know. Consider asking your friend to send you a request first to ensure you are exchanging funds with the right person.

DO

Do link your payment app to a credit card rather than a debit card to take advantage of greater fraud protections.

DON’T

Don't send money to a charity via a P2P app before first checking the charity’s legitimate website, to ensure they accept donations that way and you have the correct recipient name.

DO

Do double check the payment recipient’s information. Look out for incorrect phone numbers or misspellings to be sure your funds are going to the right person.

DON'T

Don't reuse the same password for your P2P app or bank account that you use elsewhere. Always create unique, strong passwords, enable multi-factor authentication, disable automatic logins and keep your apps up-to-date.

DO

Do think twice about businesses that only accept payment via P2P apps — this could be a warning sign.

DON'T

Don't make your P2P payment transactions visible to the public. This could give fraudsters intel to target you better in the future.

Other Scams to Be Aware Of

Wealth Management Tech Support Scams Fraud artists are savvy and can be very convincing. The Tech Support Scam is a popular social engineering technique, with several twists.
Wealth Management Grandparent Scams The bond between a grandparent and grandchild is unique. Unfortunately, fraudsters may exploit this loving, trusting relationship to trick you and steal your money.
Wealth Management Advance Fees Scams If something sounds too good to be true, it usually is. Keeping that age-old adage in mind is the best way to spot and thwart Advance Fee Scams.
Wealth Management Romance Scams According to the FTC, Romance Scams are one of the top five scams targeting American seniors age 60 and above—and have increased significantly in recent years.
Tech Support Scams
Wealth Management Tech Support Scams
Grandparent Scams
Wealth Management Grandparent Scams
Advance Fees Scams
Wealth Management Advance Fees Scams
Romance Scams
Wealth Management Romance Scams

Security Center

At Morgan Stanley, safeguarding your assets and personal information is among our highest priorities. Learn about our security measures and use our resources and ideas to help protect yourself online. 

Learn How to Protect Yourself

Sources:

https://www.fcc.gov/more-consumers-adopt-payment-apps-scammers-follow

https://www.consumerfinance.gov/about-us/blog/helpful-tips-using-mobile-payment-services-and-avoiding-risky-mistakes/

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