Money Transfer Apps: Common Scams and How to Avoid Them

0

Mobile payment or money transfer apps are a convenient way to send and receive money.

As they grow in popularity, more and more scams occur. Here’s information on common scams and how to avoid them.

Cryptocurrency: what is it and how does it work?

How do mobile payment apps work?

Venmo, Cash App, and PayPal are all mobile payment apps. They allow you to send and receive money via your smartphone or online. After downloading the app and creating an account, you will need to select a payment method or source of funds. This can be a bank account, debit card or credit card.

Once the account is created, you will be able to send and receive money. However, when someone sends money, it doesn’t go directly to your bank account. The money is added to your balance on the app. The money can stay there for later use or you can transfer it to your bank account.

Common scams

At the moment, a few scams are circulating on CashApp:

  1. CashApp flipping – look for direct messages from users offering to help you turn a small amount of money into larger amounts by “flipping” and then walking away with the cash.
  2. Fraudulent Payment Claims – watch for messages claiming you are entitled to a payment but must first send a lower amount to claim – you will not receive funds.
  3. Selling pets – this scam has become very popular during the pandemic. Scammers charge potential pet owners for an animal that doesn’t exist. Typically, they offer pets at unusually low rates and insist on shipping them rather than picking them up in person.
  4. CashApp Phishing and Impersonation Scams – scammers pretend to be a CashApp service representative via email, social media, phone or text message to collect personal or financial information.
  5. Gift card scams – scammers ask you to purchase a gift card on their behalf after sharing the gift card information to verify the purchase they make without paying you.

How to avoid paying a scammer

Scammers will often try to trick you into sending them money through a mobile payment app because it’s hard to get back once you’ve done so. The FTC reminds us that scammers often pretend to be a loved one in trouble and ask you for money to deal with an emergency. Others may say you won a contest, but you have to pay a fee to get it back. Here are some things to keep in mind if you’re paying through mobile payment apps:

  • Do not send payment to claim a prize or collect contest winnings
  • Do not give your account credentials to anyone who contacts you
  • Protect your account with multi-factor authentication or PIN
  • Before submitting a payment, check the recipient’s information to make sure you’re sending money to the right person.

If you’ve sent money before and think it might be a scammer, be sure to report the payment to the transfer service you use.

IRS seeks to create free tax return, reimburse 1.6 million Americans who missed filing deadlines during pandemic, expose data of 120,000 taxpayers

Share.

Comments are closed.