Tips On Avoiding Payment Scams & Fraud This Holiday Season

December 22, 2022

A growing share of consumers are increasingly utilizing peer-to-peer (P2P) payment networks to send and receive money – with the number of real-time transactions expected to nearly triple by 2026. At the same time, fraudsters are increasingly executing sophisticated scams targeted towards unknowing users of these mobile apps. This holiday season, the Consumer Bankers Association (CBA) is amplifying tips and recommendations from America’s leading banks on how all consumers, including P2P users, can avoid falling prey to scams. 

In a new statement, CBA President & CEO Lindsey Johnson said: 

“P2P networks, including Zelle, have soared in popularity, transforming the way millions of Americans move money and conduct digital transactions. Our members remain fully committed to protecting consumers’ access to these valued financial tools, and are working diligently to prevent, detect, and mitigate rising instances of online fraud. By sharing these tips and recommendations, CBA hopes to empower more consumers this holiday season with the knowledge to avoid scams and protect their hard-earned money from criminals.”  

Avoid “Account Upgrade” Scams 

One marketplace scam which is becoming more popular involves a fake email allegedly from the digital transfer app claiming that your transaction cannot be completed until your account is “upgraded.” These emails actually come from scammers. If you go through the process to “upgrade” your account, you are simply sending the scammer money for an upgrade which does not exist. Don’t fall for it. 

Be on the Lookout for Phishing Attempts

Scammers have begun sending text messages or emails claiming to be a fraud alert from the app or your bank. If you don’t recognize the email or phone number, you should proceed with caution. Contact the app’s security personnel through its website immediately and don’t assume that someone reaching out to you and claiming to be with the company is being honest. 

Slow Down

Like many online scams, money transfer scams often involve a false sense of urgency to trick you into acting quickly and without consideration. Scammers will sometimes offer products at unrealistic prices to trick consumers. If an offer seems too good to be true, it probably is.  

Double-check Account Information

Even a single incorrect letter or number in a username can result in your payment going to the wrong person – without the opportunity to get it back. Some apps prompt senders to verify the recipient’s phone number or otherwise verify their identity. While this is important, don’t rely solely on these safeguards. Double and triple check the recipient’s account information before you click send. 

Report Suspected Scams

Reputable e-commerce sites have safeguards in place designed to protect buyers and sellers. If you are the victim of a scam, or believe you may be, be sure to immediately report the incident to your payment app of choice and, if you are sending money to a company for a purchase, report it to that company, too.

Understand the Risk

Historically, monetary gifts for the holidays may have come in the form of cash, checks, or savings bonds. But as P2P transfers become more popular, consumers should recognize that, in many cases, these payments are immediate – as if handing someone cash – and cannot be reversed. Only send money once you’ve verified the recipient’s account information and know that if the amount or destination change, you are unlikely to get your money back.