A New P2P Scam to Watch For

In our November 26th Blog post, “P2P Safety Tips,” I told you about a common tactic that fraudsters use via person-to-person apps (like Zelle) that can drain your bank account. Here we are again just a few months later talking about P2P scams. I always say that scammers are opportunistic. It seems like they have found another way to con you. Curious? Keep reading.

Imagine getting a text message from your financial institution asking if you had attempted a high-dollar transfer via Zelle. You respond, “No,” but receive a call shortly after letting you know that the transfer went through. The good news is, the money can be recovered! A call like this is sure to cause a panic, which means that as the victim, you are not going to be thinking clearly.

In this scenario, the fraudster knows that you just want your money back, and you will likely cooperate with the perceived financial institution. They will walk you through transferring funds back to your account via Zelle, but what you don’t know is that they have likely already opened a fraudulent account with your bank using a stolen identity. The fraudster goes through the steps to link the accounts, bypassing detection by instructing the user to disable their mobile number in Zelle. The scammer will then con the user into verifying the passcode necessary to complete linking the two accounts. From there, they tell the user to transfer the “stolen” money from Zelle to themselves. In reality, the transfer actually goes to the fraudster.

The problem with these types of scams is that there is very little that protects the victims. Falling prey to an attack, such as the one outlined above, can mean that the stolen money is never recovered. So how do you protect yourself from becoming another fraud statistic?

·         Never give out your banking credentials to anyone – not even your bank. Any legitimate financial institution will not ask you for your password or any code necessary to confirm your identity.

·         Use P2P apps with EXTREME caution. Before you send any money to another person, you want to be certain of their identity. Authorizing a transfer via Zelle, even if you were scammed, is still an authorization, and you may never see the money again. 

·         If you receive a text message or email from what appears to be your financial institution, avoid clicking on any embedded links. Remember to hover over the sender’s email to verify the domain and never send personal information via email.

·         If you receive a phone call from someone claiming to be an employee of that institution, end the call, and dial the bank at a known, published phone number. Just because your caller ID shows the financial institution's name, doesn’t mean that it is them – phone numbers are easily spoofed.

·         Register for purchase alerts and fraud alerts on all of your credit and debit cards to detect fraud at the earliest signs.

Do you use Zelle or other P2P apps? I want to hear from you! Leave a comment below or email me.

Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that help consumers reach and maintain financial security and start living the life they’ve always wanted.