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Kimberly Palmer

As a frequent PayPal user, I wasn’t surprised to see the payment request pop up in the app. But when I read it, I realized that something was wrong.

In the message, a stranger asked me to send $699 to receive a “compensation”. Although I immediately recognized the request as a scam, I still felt vulnerable; I didn’t immediately see any obvious way to flag the request as a scam, and with just one click I could have accidentally sent this stranger a huge amount of money.

I’m hardly alone in my security concerns when using peer-to-peer payment apps. According to a Pew Research Center survey published in September 2022, about a third of people who use payment apps or websites say they are “a little bit.” or not at all sure that payment apps or websites protect people’s personal information from hackers or unauthorized users.” And an alarming 13% of people who have ever used PayPal, Venmo, Zelle or the Cash App say they made the mistake of sending money to a scam artist.

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Fraud prevention experts recommend these strategies to keep your money safe.

Send money only to people you know

In general, peer-to-peer payment apps are designed for sending money between friends, not strangers. If you use them to send money to someone you don’t know, you’re putting yourself at risk for fraud.

“You shouldn’t send money until you’ve met people in real life and you know who you’re sending money to. If you do that and are careful about which number you send money to, these apps can be a convenient, safe and efficient way to move money,” said Paul Benda, Senior Vice President of Operational Risk and Cyber ​​Security. American Bankers Association, the trade association for the banking industry.

Use cash and credit cards in higher risk situations

If you need to exchange money for goods or services with a stranger, the safest way to do so is with cash or credit cards, says Axton Betz-Hamilton, an assistant professor at Southern’s School of Health and Consumer Sciences. Dakota State University and author of “Less People Know About Us,” a memoir about identity theft.

Credit cards, for example, come with fraud protection. “I want that protection, so I don’t use these apps,” he says.

While stolen cash may be more difficult to recover, it may be covered by homeowners and renters insurance policies (up to your policy limits and depending on your policy).

Beware of unsolicited messages, calls or requests

Scams are often perpetuated when scammers send a text, phone call, or other type of message urging you to send money, perhaps claiming you’re getting a chargeback or a late bill.

“Fraudsters continue to get better at what they do,” said Joel Williquette, senior vice president of operational risk policy at Independent Community Bankers of America, a trade group for community banks. This includes sending emails that look almost indistinguishable from legitimate bank emails.

A cybercriminal may impersonate the IRS or the FBI and ask you to immediately pay a peer-to-peer payment to satisfy a debt, but Williquette says legitimate agencies will never contact you by text or call your cell phone with an urgent request for money.

“Usually, they send you an email,” he says, and they don’t require payment through apps or gift cards, another red flag.

A fraudulent payment request sent by a Balance payment app “is usually a small dollar amount and may even look like it’s from a friend,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center, a nonprofit organization. .

Velazquez urges people to check requests first, double-checking that they’re sending money to the right person, adding that it’s easier to get scammed when you’re distracted and multitasking.

Brush up on your cyber hygiene

Enabling two-factor authentication on financial accounts, adding a pin lock to your phone and using unique passwords of at least 12 characters can help keep you safe, Velasquez says.

Additionally, he suggests setting your app’s privacy settings to the most private setting to minimize the amount of information about you that is publicly available.

Report fraud attempts

According to PayPal, if you receive a payment request like I did, you must cancel the request without paying. Alternatively, you can take a screenshot and forward it to [email protected] PayPal adds that you should not respond to, open links, download applications, or call any phone numbers included in the survey.

If you’ve mistakenly disclosed any financial or personal information to a scam artist, PayPal says you should immediately change your password, notify your bank and report any unauthorized payments to PayPal. You can also report your fraud to the Federal Trade Commission at, a government website that provides information to law enforcement agencies.

In my case, I followed the recommended step to cancel the payment request and never heard from my scam artist again. With the enhanced security steps in place, I plan to continue using the convenience of PayPal and other payment apps, and now I know what to do the next time I receive an unsolicited payment request.

This article was written by NerdWallet and originally published by the Associated Press.



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