Authorized Push Payment (APP) Fraud

People First Since 1912

We live in an increasingly digital and mobile-friendly world that’s changing how we do things in our business and personal lives, like how we can now exchange payments and funds through phone app-based push payments. Often called peer to peer, person to person, or P2P in the financial industry, these apps make it easy to create an account, conveniently send funds, and are fundamentally secure. In its simplest terms, two people transfer funds to each other using their bank accounts or credit cards through mobile apps like Zelle, Venmo, and CashApp. The opportunities to use electronic money transactions are endless, like gifting your grandkids money, splitting the bill at dinner, or paying your rent. The global P2P payment market was $1.8 trillion in 2021 and will most likely surpass $5.2 trillion by 2028. 

Scammers have caught on to how easy it is to send money with these apps and are taking full advantage. A common scheme is where a fraudster impersonates your bank to alert you about “suspicious activity” on your account and directs 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 banks will never tell you to send money to anyone, not even yourself. In another tactic, bad actors may pose as a legitimate business and ask for a P2P payment. Sadly, once they have your money, they disappear, and you will never get the goods or services you attempted to purchase. Someone may also claim to represent a fraud department and ask you to confirm information (ex: bank account username and password, credit card or debit card data, or Social Security numbers). They will then take that info and try one or all of the following: to create a new P2P account, identity theft, or try to gain access to your existing accounts.

If you follow the best practices for P2P payment services listed below, they can be a simple and generally trouble-free way to send and receive funds. 

Best Practices for P2P Payments:

Use the apps to pay friends or family in person. Be wary of strangers or online retailers. If an online retailer requires payment or deposit via a P2P payment service, be careful that it could be a scam. It’s much safer to use a P2P payment service in-store, in front of the retailer, when you’ve already received your items or service (ex: small businesses, farmers markets, babysitters, et.)

Review all your transactions before you click send – once it’s gone… it’s gone. Double check the email, username, or phone number of the person you are attempting to send money to. It is almost impossible to recall those funds if you pay the wrong person. If you are uncertain, try sending a smaller amount first to confirm that your intended recipient received it.

 Never share your personal information or bank authentication (verification text numbers or PIN). These can be spoofed even if the Caller ID indicates it may be your bank. Banks will NEVER ask for those details. If you are pressured or something feels “off,” hang up and contact your bank directly using the number on the back of your card or on your bank statement.

 Don’t let strangers persuade you to send money to yourself or anyone else. If a scammer “accidentally” sends you money on a P2P service, never send the money back, as it’s often sent from a stolen P2P account. Reach out to your bank or P2P service directly about the issue. The payment service will eventually flag that account as a fraud, and if you send money back to the scammer via the same or another account, you could be held responsible.

Be careful when “Googling” customer service phone numbers. Many fake websites with toll-free numbers claim to be customer services for banks. Always use the number on the back of your card or on your bank statement.

Set up transaction alerts. P2P service providers and your bank can set up alerts to notify you of all transactions in your account. Monitor these regularly for suspicious activity.

Make your P2P App more secure using biometric fingerprint, PIN, or multifactor communication. This enhanced layer of security will defend your accounts should your phone become lost or stolen. 

Keep your phone and P2P apps up to date. Having all the latest security features will keep you and your money safe. 

If you believe you are a victim of a P2P payment scam:

  • Notify the P2P payment platform 
  • Contact your bank 
  • File a complaint with the Federal Trade Commission or call 1-877-FTC-HELP (382-4357).


Data Sources: Federal Trade Commission, American Bankers Association, Vantage Market Research

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