Scam artists are looking for new ways to trick you

It used to be that banks and credit card companies were the main targets for financial fraudsters.

Not anymore.

Now, digital payment providers like PayPal, Venmo, Cash App, and Zelle find themselves in the crosshairs of electronic data.

According to the latest Telephone fraud monitor reportAnd Zelle data fraud incidents are up 816% from 2021 to 2022. Meanwhile, PayPal data fraud incidents are up 31% over the same time period.

High fraud rates are a big red flag, as it indicates that scammers see some companies as easier targets.

“Scams that show rapid growth deserve our attention, as they often become mainstream scams in the years to come,” said Robert Lowry, vice president of security at BeenVerified, which released the Phone Case report.

Fraud victims surveyed by BeVerified say the payment structure associated with digital payment transactions lends itself to fraudulent behaviour.

According to the report, hired scammers tend to lure victims with fake listings on Facebook Marketplace, and then defraud them using Zelle as a popular payment method.

The report said scammers often pretend to be owners of rental properties that they don’t actually own. One scam victim told BeenVerified that she and her husband paid $1,790 via Zelle for a rental property up front only to see the payee take the money and run.

Pet scams are another hot market for scammers.

Cyber thieves post “pets for sale” online, demand a transaction deposit from unsuspecting buyers and once they receive the money, stop any contact with the buyers and cash in. In two separate incidents using Zelle, buyers lost $700 and $1,000, respectively, in pet-related scams.

How to fight digital payment fraud

Payment apps should be required to maintain the same protections that banks maintain for their customers. Unfortunately, they do not have to bear this burden from an organizational point of view.

“As non-bank technology companies, they are not subject to the same regulatory standards as banks,” he said. FinTech Chief Technology Officer Sandy Flederman. “Payment apps want to reduce their liability and maintain customer loyalty which drives their security and protection systems. But they are not required to offer guarantees to their customers or offer insurance like the FDIC.”

Another major problem is that these types of transactions are often irreversible.

He said, “Unlike a credit card, where you can dispute fraudulent charges, once a payment is made through a peer-to-peer app, it is usually impossible to recover that money.” Top Banks Mobile founder Tommy Gallagher. “This makes users particularly vulnerable to fraud, as they have no way of getting their money back if they fall victim to fraud.”

In addition, digital payment applications often rely on users entering their personal and financial information, such as bank account numbers and login credentials. “If this information falls into the wrong hands, it can be used to steal money or make unauthorized purchases,” Gallagher said.

Data security experts advise users of payment apps to be especially careful before sending money to people or companies they don’t know. Use these tips and tactics to keep your money and data safe in 2023.

A lot of personal data is available online

Don’t share personal information with any digital person or company you don’t know. One problem with Zelle is that it’s an essential service for consumers to send payments to each other using their banks, rather than using a third-party service like PayPal.

“It’s very much based on phone numbers and emails,” he said, “and in theory it’s something only friends and family have.” MerchantMaverick.com Payments processing analyst Melissa Johnson. “But we’re in 2023 now, and that kind of data is on big lists that can be bought by almost anyone willing to shell out the money.”

Thus, scam artists regularly extract lists of phone numbers and emails and routinely demand payment, posing as friends and family.

“This is why Zelle now has a feature that notes when a contact’s name on your phone doesn’t match the name associated with the account,” Johnson added.

Online payment platforms like Cash App and Venmo have made users’ handles public, which means anyone can request money from someone as long as they know the username.

Because these accounts exist as digital wallets separate from bank accounts, Johnson said, there are various security issues. “Accounts can be hacked, money drained and sent to a bank account halfway across the world, and users can be left with a very limited opportunity to get their money back,” she noted.

As a result, digital payment consumers need to learn the basics of online security and maintain the security of any account before engaging online.

“Know what you’re signing up for and make sure you know your username and password,” Johnson said. “If you have trouble remembering passwords, have a secure password manager installed on your computer and phone.”

Be smart when using digital payment platforms. Online payment consumers need to be vigilant when they see email or texts that personal accounts are closed or when they encounter unexpected requests for funds, among other things.

“These are scams,” Johnson said. “Never click on a link from a text message or email — always go directly to a site or app and sign in if you want to verify the legitimacy of the message.”

Oftentimes, these scams rely on a sense of urgency and attempt to create panic in order to trick the person into acting quickly and without thinking.

“If you take a moment to breathe and remember to be safe online, you can avoid any negative digital payment pitfalls,” Johnson added.

Be vigilant about data security in the long run. Digital payment users should also take the following steps to keep their financial accounts and data secure.

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