Safety Tips for Accepting Mobile Payments
Mobile apps like Zelle, Venmo, and Apple Pay make it easy to split the bill with your friends. You don't have to say, "I'll get it next time" anymore. Instead, you can instantly pay your share of the tab with a quick transfer.
The convenience of these apps cannot be understated. Once you link your bank account, transferring money to a friend is just a few short clicks away.
But the convenience, ease, and simplicity of these person-to-person platforms is one reason why they have become a target for scammers. Another reason fraudsters love these apps is because it's a challenge to have these transactions reversed. The majority of the time, once the money leaves your account, it's gone.
So before you sign up or send your next transaction, it's important to understand common scams, as well as best practices for sending money to friends and sellers.
The Overpayment Scam
This scam typically targets people who are selling items online. Imagine you have an Etsy store selling handmade jewelry. And a buyer contacts you about a certain item and wants to pay by check.
Here's how the scam works: the scammer will write the check for more than the price of the item. They'll contact you and say they've made a mistake, but it's no big deal. They don't want to be a bother or put you out because they've made a mistake. All you have to do is simply send them the "extra" money through some person-to-person app.
Here's the rub. The check was never real. And since the check was never real, it bounced, and now you're on the hook for the full amount, and any overdraft charges that may have occurred if you had insufficient funds in your account.
This scam works because it typically takes 1-2 business days for the funds from the check to be available in your account. But it takes many more days, sometimes weeks, to determine if a check is fraudulent.
The overpayment scam is just one common "fake check scam." But it's not the only one. You can learn more about the different types of fake check scams from the Federal Trade Commision.
Learn more about common online selling scams.
The Convenience Scam
This scam is essentially a new twist on an old classic: the confidence scam. It's where the phrase "Con Man" comes from.
The fraudster will gain your trust, your confidence, by appealing to your emotions or good nature through a well-rehearsed act. They will essentially play a character.
Once they have your trust and a deal is made on something you're selling, they'll offer to save you time and make the process easier on you. "How about I just log in to your mobile banking account and deposit the check myself," they'll say. Or they might ask for your username and password for one of the person-to-person apps, so they can just make the transfer themselves.
Once they have that information, they have access to all of the funds in your account. And they'll most likely start initiating transfers to other accounts they own. If they have access to your username, they can also start requesting money from people you know.
This scam typically works because the fraudsters play on people's unfamiliarity with digital banking apps. Best practices are to never give anyone your username and password for any reason, and never conduct a transaction on someone else's behalf.
How to Safely Use Mobile Apps
If you're transferring money to someone you trust, like friends or family members, then all you really need to do to keep your money and your information safe is verify their username with them before you send the funds.
If you're buying from someone online, the best thing to do is some quick research. Verify their business or website, look for customer reviews or testimonials, ask on social media if anyone has bought from them before. If they're using a secured channel like Paypal, they're most likely legitimate. If they're asking for money through a person-to-person app, you might want to be a little skeptical.
Always trust your instincts too. If something feels a little off or questionable, be cautious. Scams are well rehearsed and can feel like an honest person making an honest mistake. That's intentional. Fraudsters play on your emotions and humanity to manipulate and trick you into giving them you trust.
If you're ever in doubt about the legitimacy of a transaction or the sincerity of the seller, it's best to be cautious and ask questions.
If you've been victimized, report the scam to the FBI's Internet Crime Complaint Center.
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