How to Avoid Fraud in Popular Peer-to-Peer Payment Apps

Fraud Protection


3 min. read

By: FCU Team

Peer-to-peer transfers have revolutionized the way we handle our money. We no longer need to carry around much cash, or stress over how to pay our friends and family back for meals. For the most part, using apps like Venmo and CashApp is overwhelmingly safe, but that doesn’t mean that fraudsters aren’t trying to take what isn’t theirs.

What Does This Kind of Fraud Look Like?

There are a few different ways that P2P apps can be used for fraud, many of them not even requiring you to have used the apps before.

Using Apps for Purchasing Products and Services

One common type of fraud occurs when a victim purchases a product using their P2P app for the transaction, and never receives the desired product. Conversely, you might sell something, like a TV or a musical instrument, and never receive funds for payments. Apps like Venmo and the other top P2P apps are actually intended strictly for personal use. This includes things like picking up a bar tab for a friend, or splitting a meal at a restaurant. Where many fall victim to fraud is when they use the apps for commercial purposes.

The reality is that the payment service you’re using will not be obligated to help you get your money back because your transaction will have broken their terms of use if it was commercial in nature. Do yourself a favor and keep P2P transactions between friends!

P2P Account Creation

If you don’t use any payment services or apps, you might be thinking you’re in the clear. Wrong! Fraudsters can still use these services to steal your hard-earned money. By stealing your credit card information, whether through a physical or digital means, fraudsters can create accounts in your name on those apps and transfer money out of your accounts.

Can I Borrow Your Phone?

Always be careful who you give your phone to! P2P apps often have “stay logged in” options, making it easy for fraudsters to transfer funds from your phone very quickly if they get their hands on it. You should also make sure you never leave your phone unattended, and always have a security measure in place to prevent fraudsters from accessing your phone easily. Theft is often a crime of opportunity. The easier you make it for a fraudster to steal your information, the more likely they are to do it.

What You Can Do to Prevent Fraud

Now that you’ve learned about a few different fraud types associated with peer-to-peer apps and transfers, let’s go over some tips you can employ to protect yourself.

Before you start sending and receiving money, you should familiarize yourself intimately with the app or platform you’ve chosen to use. Things like knowing where to contact customer support and what steps to take when you think there’s an issue. This can even help you identify potential fraudsters. For example, Cash App doesn’t have a direct line you can use to speak to someone in support, which means that if you get a call from someone claiming to be from Cash App, it’s likely a fraudster. In fact, most payment app providers prefer to do their troubleshooting through the app itself. In some cases, they only offer support through email or the app over offering phone support.

Keeping all that in mind, you should know that it’s always okay to hang up the phone if you get a bad feeling about the call. Fraudsters will try their best to keep you on the line with both vague and specific threats. Just know that if the person or institution contacting you is legitimate, they’ll be okay with you hanging up if you feel unsafe.

Another easy way to minimize your risk of fraud is to make sure you’re only sending money to trusted sources, like friends and family! Of course, always make sure to verify usernames/accounts when you’re getting ready to send money. In addition, please remember that P2P apps are not meant for commercial use. If you are buying or selling goods from people, it’s safer to use cash, other payment services like PayPal that are specifically meant for commercial use, or verifiable payment methods like money orders.

While extra security measures can be a pain, opting to use two factor authentication options like PIN numbers can reduce the likelihood of a fraudster being able to steal money from your account. Caution is everything, especially when it comes to financial matters. Financial institutions are often unable return payments as a result of fraud, and that’s why we want to make sure you’re able to spot these traps before you step into them!

The last thing you can do is visit our fraud prevention page for even more information on how to avoid fraud online!

What to Do If You Think You May Be a Victim of Fraud

If you’ve take the proper precautions, but still believe you might be a victim of fraud, contact your financial institution immediately. Reporting fraud early, freezing cards and contacting the authorities can be beneficial and instrumental in minimizing the amount of damage fraudsters can do. If you’re a Florida Credit Union member and think you may be a victim, contact us at your local branch number and press Options 2-2-2; the call will be routed to our 24-hour fraud department. You can also call them directly at 800-449-7728.