Protect Yourself from Mobile Payment Scams

Thanks to peer-to-peer (P2P) payment apps, sending and receiving money has never been more convenient: All you need is a smartphone and an app. These mobile payment apps make it easier than ever to split the check or send money to loved ones, but they’re also an easy target for fraudsters.

When you make a P2P payment, the money is immediately deducted from your balance and credited to the recipient. You can dispute a credit card charge, cancel a bill payment, or stop payment on a check, but you generally don’t have the same option with mobile payment apps¹. This makes P2P payments attractive to fraudsters: money they receive from you can be in their accounts within a few moments — and it might be difficult for you to get it back.

Think of mobile payments like cash. If you pay someone with cash but never receive the goods or service, your money is gone. The same is true for P2P apps — most financial institutions will not reimburse you for authorized payments.”

10 ways to protect yourself from mobile payment scams

1. Use a strong password. This may seem basic, but the harder you make your password for P2P apps, the less likely you will be subjected to fraud. A strong password includes symbols, numbers, and words that cannot be easily predicted.
2. Enable two-factor authentication (2FA). This requires an additional step, like a text message with a code, to verify your identity when you log in to a P2P app.
3. Biometrics are best. Apps that require your fingerprint or face ID with every transaction provide an extra level of security.
4. Don’t loan your phone to strangers. A fraudster could open up your banking or P2P app and quickly transfer money out of it.
5. Only use P2P apps with people you know. Think of mobile payments like cash. If you pay someone with cash but never receive the goods or service, your money is gone. The same is true for P2P apps — most financial institutions will not reimburse you for authorized payments.
6. To sell your stuff, use marketplaces and payment networks with protection. These services offer sellers protection to prevent you from being charged back if a buyer later claims their purchase was unauthorized or they didn’t receive the item. Many marketplaces have their own payment networks (or an authorized payment network) that provide additional protection.

   Contrast this with using a P2P app and a classified ad – although most transactions are legitimate, you have little protection from fraudsters sending money from stolen P2P accounts, and then disappearing with the item you sold – leaving you not only without the item, but potentially also on the hook for the money that was fraudulently sent to you.

7. Never share verification codes. A vishing scam works like this: A fraudster calls you from a number that looks legitimate and asks for a code (like what’s mentioned above in #2) or for your personal information in order to access your accounts.
8. Beware of phishing scams. Never click on links or fill out online forms you receive unexpectedly from online sources.
9. Avoid giving P2P apps access to your phone’s contacts and other information. The less access apps have to your personal information, the more protected your information will be.
10. Have a weekly money date to check outgoing transactions. Sometimes scams go undetected because people haven’t realized money has left their account. If anything seems suspicious, report it immediately.