Money Transfer Scams
Peer-to-peer payments, or P2P payments, allow consumers to transfer money using their bank accounts, debit cards, or credit cards through a website or mobile app such as Cash App, Google Pay, Paypal, Remitly, Venmo, and Zelle. It’s like sending cash and the transfer usually requires just a few clicks.
Although P2P payment services can be easy to set up, simple to use, and are generally secure, it’s important to be aware that criminals may try to scam you into sending money.
Be on the lookout for some of these common scenarios:
- Scammers impersonating your bank may call to alert you about “suspicious activity” on your account and direct you to send money to yourself or “the bank’s address” to reverse a transaction or to verify the account is not frozen. However, your bank will never tell you to send money to anyone, not even yourself. Criminals try to make you believe you’re sending money to yourself, but you’re actually sending money to the impostor.
- Fraudsters may reach out claiming to represent a fraud department or merchant and ask you to confirm information such as your bank account username and password, credit card or debit card data, or Social Security numbers. But do not share this information — scammers want to create a P2P account with your information, steal your identity, and gain access to your accounts.
- Scammers posing as a legitimate business may request a P2P payment for a product or service. Once they receive your money, you never receive what you paid for and they disappear. Treat P2P payments like cash — don’t pay until you receive the product.
- You accept a work-from-home position and the new company sends you a check to deposit, then asks you to send all or part of the funds to someone else using a P2P service. Do not deposit the check — the company is a scam and the check will bounce, leaving you on the hook for the amount of the fake deposit.
- A scammer “accidentally” sends you money on a P2P service and asks you to send the money back. Never send back the money, and instead contact the P2P service about the error. Criminals’ accounts usually use stolen funds that the P2P payment service will eventually flag as a fraud. If you send money back to the scammer, the P2P service could take funds out of your account or hold you responsible.
- Con artists may ask to borrow your phone for a contrived emergency. Do not hand over your phone to strangers, as they could make financial transfers using your payment apps and accounts.
10 Do’s and Don’ts to protect yourself:
- Don’t send money to someone you don’t know or have never met in person.
- Don’t share bank authentication or verification numbers or your personal information with anyone who contacts you, even if caller ID indicates it’s a familiar company. Keep your account usernames and passwords, Social Security number, and bank account, debit, and credit card information to yourself. If you’re pressured or have any concerns, hang up and contact your bank directly using the number on the back of your card or on your bank statement.
- Don’t let any strangers persuade you to send money to yourself or to anyone else.
- Don’t let anyone you don’t know borrow your phone.
- Don’t do a Google search for customer service phone numbers. Scammers have created fake websites with toll free numbers that connect to them. Only call your bank using the number on the back of your card or on your bank statement.
- Do be sure to know and trust the other party who’s receiving your money. Confirm the name, email, phone number, or applicable identifier when you transfer money. If you make a mistake, even one wrong digit, you will send your money to someone else who may not give it back. Just like handing someone cash, your bank can’t get it back for you.
- Do set up alerts to notify you of any transaction on your account.
- Do enable multi-factor authentication — a step to verify who you are, like a text with a code — for all accounts and do not share the verification codes with anyone, including anyone claiming to be the bank.
- Do ensure that any bank or P2P app you use is updated so it is secure.
- Do be wary of accessing any financial or personal information on public Wi-Fi or mobile hotspots. They often lack security and hackers can capture sensitive personal information on these open servers.
Questions? Feel free to reach out!
Courtesy of the American Bankers Association
Cybersecurity is key
When cybersecurity is inadequate, it can lead to stolen identity and financial loss. Most scams and scammers have two main goals--to steal your money and your identity. You should know what to look for, how they work, and what to do, so you can protect yourself and your finances.
Maintaining cybersecurity is very important, even for consumers. It is not simply something that concerns large corporations and other businesses. Here are some steps you can take:
- Do not open email from people you don’t know. If you are unsure whether an email you received is legitimate, try contacting the sender directly via other means. Do not click on any links in an email unless you are sure it is safe.
- Be careful with links and new website addresses. Malicious website addresses may appear almost identical to legitimate sites. Scammers often use a slight variation in spelling or logo to lure you. Malicious links can also come from friends whose email has unknowingly been compromised, so be careful.
- Secure your personal information. Before providing any personal information, such as your date of birth, Social Security number, account numbers, and passwords, be sure the website is secure.
- Stay informed on the latest cyber threats. Keep yourself up to date on current scams. The Cybersecurity and Infrastructure Security Agency (CISA) can provide you with Alerts. View the Alerts page of the Cybersecurity and Infrastructure Security Agency.
- Use Strong Passwords. Strong passwords are critical to online security. Review CISA guidance on Choosing and Protecting Passwords.
- Keep your software up to date and maintain preventative software programs. Keep all of your software applications up to date on your computers and mobile devices. Install software that provides antivirus, firewall, and email filter services.
- Update the operating systems on your electronic devices. Make sure your operating systems (OSs) and applications are up to date on all of your electronic devices. Older and unpatched versions of OSs and software are the target of many hacks. For more information, read the CISA security tip on Understanding Patches and Software Updates.
Here are some trending scams to look out for:
Scammers use people as “money mules” to receive or move money obtained from victims of fraudulent activities. Scammers proactively recruit people to be part of fraudulent activity without their knowing it. If a stranger asks you to open a bank account, or asks for access to your bank account or debit card, be extremely guarded. A scammer may ask you to move money and direct you to deposit funds into your bank account, or ask you to purchase virtual currency or gift cards for someone else’s benefit. In these scenarios, you may be unknowingly hiding someone else’s money for them. Be very cautious if a stranger asks you to receive or forward packages containing money or goods, which may also be part of a similar fraudulent scheme.
If you believe you have engaged in, or contributed to, money mule activities, stop transferring money or merchandise, and stop communicating with the person giving you direction. Then, immediately report your concern to your bank. Your banker can assist you with the appropriate steps toward protecting your bank account and money. You should also report the suspected activity to law enforcement. Visit the U.S. Department of Justice webpage on money mules for more information.
Romance scammers, as they are often called, create fake profiles and try to develop relationships with their targeted victims through online dating apps or social networking websites. Once the relationship develops and they have earned your trust, the scammer makes up a story and asks for your money. Be aware that scammers are lurking in these areas, so you can keep yourself and your money safe. Visit the Federal Trade Commission (FTC) information page on romance scams.
Impostor scams are when a scammer pretends to be someone you know or trust to convince you to send them money. They may even claim they are with the FDIC or another government agency. These scams are communicated through emails, phone calls, letters, text messages, faxes, and social media. The messages might ask you to “confirm” or “update” confidential personal financial information, such as bank account numbers. In other cases, the communication might be an offer to help victims of current or previous frauds with an investigation or to recover losses. Some scams request that you file official looking forms, such as insurance claims, or pay taxes on prize winnings. They might claim that you have an unpaid debt and threaten you with a lawsuit or arrest if you don’t pay. Other recent examples include check endorsements, bankruptcy claimant verification forms, stock confirmations, and investment purchases.
The FDIC or other government agencies do not send unsolicited correspondence asking for money or sensitive personal information, and we will never threaten you, or demand that you pay by gift card, wiring money, or digital currency. Visit the FDIC Consumer News: Scammers Pretending to be the FDIC page, which has more information on impostor scams.
Mortgage and Foreclosure Scams
Watch out for scammers who falsely claim to be lenders, loan servicers, financial counselors, or representatives of government agencies who can help with your mortgage. These criminals prey on vulnerable, desperate homeowners. For more on mortgage scams and how to protect yourself, visit the FTC Mortgage Relief Scams.
Foreclosure scams usually come from multiple advertisements stating that a company wants to save you from foreclosure. This scam allows fraudsters to take the equity out of your home. They may even try to evict you from your home and sell it. Learn more at Common Foreclosure Rescue and Loan Modification Scams under the FDIC Consumer Assistance Topics.
One cyber threat often discussed in the news is ransomware. Typically, this scam targets businesses, not individuals. Ransomware is a type of malware created to lock or encrypt files on an electronic device like a smart phone or computer. The sender of the ransomware then demands a ransom in exchange for unlocking or decrypting the information on your electronic device. The scammer typically threatens to publically disclose or sell the compromised information, if the ransom is not paid.
If you believe your business is a victim of a ransomware attack, contact law enforcement immediately. You can also contact a local field office of the Federal Bureau of Investigation (FBI) or see the U.S. Secret Service's advice on preparing for a cyber incident.
Maintaining your cybersecurity will help prevent you from being a victim of identity theft and potential financial loss. Staying current on the latest types of scams can help you to identify the risks and learn how avoid them, so you can protect yourself and your finances.
For more help or information, go to www.FDIC.gov or call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342).
Courtesy of the FDIC.