Peer-to-Peer payment scams are on the rise
DFPI has detected a steady increase in complaints relating to peer-to-peer (P2P) payment scams since 2023 in California. Based on the number of P2P complaints we’ve already received in 2024, we can predict that P2P payment scams are on the rise. Peer-to-peer payments are typically done by sending money through a smartphone app. Common P2P service providers include PayPal, Venmo, Zelle, and Cash App. Millions of Americans complete P2P transactions every day to split checks, repay friends, or purchase goods and services instead of paying with cash or with credit card. Unfortunately, bad actors lurk, and users should always be on the lookout.
Recognize these common P2P scams:
Overpayment scams: Scammers “accidentally” send money to a consumer’s P2P account and then ask for the money back. Scammers often use stolen credit card numbers to deposit funds into victims’ accounts. If the innocent consumer returns the deposit, the P2P platform could remove the funds from the victim’s account or hold them responsible.
- Never send back any money that was paid in error.
- Always contact the P2P service provider directly about any suspicious account activity or transaction errors.
Imposter scams: Scammers often pose as legitimate businesses requesting P2P payments for a product or service. They might also impersonate a P2P service provider or bank to warn a consumer about “suspicious activity” on their account or that their account is about to be “suspended.” Or they might claim to represent a fraud department or merchant and ask to confirm information such as their bank account username and password, credit card or debit card data, or Social Security numbers. The account holder is then directed to a fake webpage to enter their password or other personal or financial information.
- Never share any personal information or passcodes with anyone that contacts you to inquire about your accounts.
- Do not click any links or call any phone numbers provided by potential scammers.
Fraudulent payment scams: Scammers connect a stolen credit card to a payment app. They then search for people selling big ticket items (such as a computer, tablet, or car) online. The scammers will offer to pay for the product using the app. Once the seller accepts the payment and sends the item, they’ll soon discover that the payment sent is not from a legitimate buyer, and the money collected is removed from their account. The seller loses both the item and the money.
- Treat P2P payments like cash transactions. Never pay for products until you receive them. Do your research, some P2P service providers offer a payment protection service for the purchase of goods and services.
- Make sure you know who you are sending money to or receiving money from – either people you personally know or legitimate sources you have independently verified.
If you have been the victim of a scam involving a P2P company or payment scam, submit a complaint with us or call (866) 275-2677.