TAMPA, Fla. — The use of peer-to-peer payment services like Cash App, Venmo, Zelle, and Paypal have become common.
“I think that people have a sort of sense of trust with these peer-to-peer payment apps,” said Julianne Ohlander, senior data analyst for BeenVerified.
However, according to experts, they’re now opening up consumers to more scams.
“I was trying to sell some furniture online, on the Facebook Marketplace,” said Kaitlin O’Connor, who was targeted by a scammer.
That’s one of the most common places experts warn fraudsters try to take advantage of people.
O’Connor listed her couch on Facebook Marketplace for $150 and received multiple responses.
“Got one guy who responded and was wanting to purchase it, so I said yes,” said O’Connor.
That’s when O’Connor told ABC Action News he became insistent that she use Zelle for payment.
“He tried to walk me through the Zelle process and was sending links, and when I did the link, it said that I had to have a certain account... it was just getting very complicated,” said O’Connor.
She said the scammer told her he sent her too much money and that she had to send him back the difference.
“This was when I still didn’t realize what was going on, but the money wasn’t ever showing up in my bank account. I even contacted my bank to make sure because then he was saying that I scammed him out of $300 and that I owed him his money back, but he didn’t actually ever send me anything,” said O’Connor.
Experts believe these types of scams using peer-to-peer payment methods are becoming more and more common.
According to a recent phone scam monitor report from BeenVerified, Zelle scams have increased by 86% from 2021 to 2022, and PayPal scams have increased by 31% over the same time period.
“I think people feel that 'well, if my bank is using it, then it operates like a bank.' When in reality, it’s the online payment apps. They are not banks, so they don’t have to follow the same regulations that banks do and credit cards. They are not credit cards, so they don’t have the same types of fraud protections,” said Julianne Ohlander, senior data analyst for BeenVerified.
Consumer experts said there are other red flags to look out for.
“You might receive a text message or an email saying that there is a charge of such and such amount on your account and did you authorize this charge,” said Ohlander.
A scammer will then impersonate your bank or customer support claiming from one of these apps, claiming to help you reverse a charge, asking for your log-in information in the process.
“In reality, what they’re doing is transferring the money to themselves. So although this was a fraudulent transfer, you still willingly authorized that transaction, so it’s going to be really difficult to get that money back,” said Ohlander.
Overall, Ohlander said the use of peer-to-peer payment apps is safe if you know who you’re paying. Otherwise, she warns you to be careful.
“Anything that’s when somebody is trying to use a sense of urgency, I think that’s definitely pause for taking a step back,” said Ohlander.
“Usually, it’s when you’ve been contacted by someone, and you weren’t expecting it,” she added.
