New research from AARP shows a growing number of consumers are using peer-to-peer (P2P) payment apps like Paypal, Venmo, CashApp, and Zelle for sending and receiving money. The industry has seen growth in usage since the start of social distancing, as people use the apps to buy groceries and other necessities for home delivery. But our research shows people need guidance on how to use these convenient forms of transferring money in a safe manner.
How It Works
• Buying and selling products and services using a P2P app is rife with risk. You may send the payment and never receive your item, or sell an item and never receive payment.
• In many common fraud schemes, scammers are now convincing targets to send money using a P2P app. Once the money is transferred, it’s very hard to get it back, even if you immediately realize it was a scam.
• If you misdirect a payment (known as “fat fingering”), your only recourse is to plead with the recipient to return the funds.
What You Should Know
• Many P2P apps bar people with personal accounts from using it to buy or sell goods with other personal account holders. If you lose money to a transaction that is barred, the app isn’t required to help you recover funds.
• Unlike credit and debit cards, P2P payments are not protected – it is essentially like sending cash.
• Funds should not be kept in these accounts long-term because, unlike most bank accounts, they are not FDIC-insured.
What You Should Do
• Only use P2P apps to send money to those you personally know and trust – family, friends, the babysitter; you get the idea.
• Do not exchange payment through a P2P app for something you are buying or selling online.
• Be exceedingly cautious when typing in recipient information. One wrong number or letter, and you won’t get that money back, unless you happen to send it to someone ethical enough to return it.
When it comes to fraud, vigilance is our number one weapon. You have the power to protect yourself and your loved ones from scams. Please share this alert with friends and family and visit the Fraud Watch Network.
AARP Fraud Watch Network
P.S. Are you active on social media? Do you enjoy sharing information that can help prevent friends and family from falling victim to scams? Become a volunteer AARP Fraud Watch Network (FWN) Digital Fraud Fighter! In exchange for simply sharing the same type of content with your friends and family that you already do, Digital Fraud Fighters will receive access to exclusive scam briefings, plus a Welcome Packet that includes a T-shirt, a copy of the FWN Con Artist’s Playbook, the FWN Watchdog Alert Handbook and more. Interested? Send us a note at [email protected] for more information!
To report a scam or for help if you or a loved one has fallen victim, contact the AARP Fraud Watch Network Helpline.
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