In the past, banks and credit card companies were the main targets of financial fraudsters.
not anymore.
Digital payment providers such as PayPal, Venmo, Cash App, and Zelle are now targeted by cyber data.
According to recent information Phone Fraud Surveillance Report, Zelle data fraud increased 816% from 2021 to 2022. Meanwhile, PayPal data fraud incidents increased 31% over the same period.
A higher fraud rate is a big red flag as it indicates that scammers are seeing certain businesses as easier targets.
Robert Lowry, vice president of security for BeenVerified, which published the phone fraud report, said:
Fraud victims who participated in BeenVerified investigations said the payment structures associated with digital payment transactions facilitated fraudulent activity.
According to reports, rental scammers tend to lure victims with fake Facebook Marketplace listings and use Zelle as a popular payment method to scam them.
Scammers often pose as owners of rental properties they don’t actually own, the report says. One fraud victim told BeenVerified that she and her spouse paid her $1,790 via her Zelle as a down payment for a rental property only to see the recipient take the money and run away. rice field.
Pet fraud is another hot market for scammers.
Cyber thieves post “pet sales” online, demand security deposits for transactions from unsuspecting buyers, and once they receive the money, stop communicating with the buyer and take the cash away. In his two separate incidents with Zelle, the buyer lost $700 and he lost $1,000 each in pet-related fraud.
How to combat digital payment fraud
Payment apps should maintain the same protections banks maintain for their customers. Unfortunately, from a regulatory perspective, we don’t have to bear that burden.
“As non-bank technology companies, they are not bound by the same regulatory standards as banks,” he said. Industry Fintech Chief Technology Officer Sandy Flyderman“Payment apps want to reduce liability and maintain client loyalty driving security and protection systems. there is no.”
Another big problem is that these types of transactions are often irreversible.
“Unlike credit cards, where fraudulent charges can be contested, once payments are made through peer-to-peer apps, it is typically impossible to recover those funds.” Tommy Gallagher, Founder of Top Mobile Banks“This makes users particularly vulnerable to fraud, as there is no way to get their money back if they fall victim to fraud.”
Additionally, digital payment apps often rely on users entering personal and financial information such as bank account numbers and login credentials. “If this information falls into the wrong hands, it could be used to steal money or make fraudulent purchases,” he said.
Data security experts advise payment app users to be extra cautious before sending money to strangers or businesses. Keep your money and data safe in 2023 with these tips and tactics.
A lot of personal data is available online
Do not share personal information with digital individuals or companies you do not knowOne of Zelle’s problems is that the basic service is for consumers to use their banks to send payments to each other rather than using third-party services such as PayPal.
“It mostly relies on phone numbers and emails. In theory, these are things only friends and family have,” he said. Merchant Maverick.com Melissa Johnson, payment processing analyst. “But now it’s her 2023, and that kind of data exists on a massive list, available for purchase by just about anyone willing to pay big bucks.”
As a result, scammers routinely mine lists of phone numbers and emails, pretending to be friends and family members and requesting payments on a regular basis.
“That’s why we added the ability to notify Zelle when the contact name on your phone doesn’t match the name associated with your account,” Johnson added.
Online payment platforms such as Cash App and Venmo expose user handles. This means that almost anyone can claim funds as long as they know your username.
Because these accounts exist as digital wallets separate from bank accounts, there are many security issues,” Johnson said. “Accounts can be hacked, funds can be exfiltrated and transferred to bank accounts around the world, leaving users with little avenue to get their money back,” she noted.
As a result, digital payment consumers need to learn the basics of online security and keep their accounts safe before going online.
“Know what you signed up for and make sure you know your username and password,” says Johnson. “If you have a hard time remembering passwords, install a secure password manager on your computer and phone.”
Use digital payment platforms wiselyConsumers of online payments should be especially vigilant if they see an email or text stating that their personal account has been locked or face an unexpected request for funds.
“These are scams. Never click on links in texts or emails. Always go directly to the site or app and log in if you want to be sure the message is legitimate,” Johnson said.
Often these ploys rely on a sense of urgency, creating panic and tricking people into acting quickly without thinking.
“If you take a breather and remember that the internet is safer, you can avoid the negative pitfalls of digital payments,” Johnson added.
Be mindful of data security over the long term. Digital payment users should also take the following steps to keep their financial accounts safe and their data safe.
— Note the email address that is sending the alert. “Look for official emails (e.g., those ending in @paypal.com), not fake addresses (e.g., @paypal-support.com).” Data Security Expert Hope Oje, Book Author, SCAM”
— Block someone from connecting to payment apps on your behalf. “That’s true even if they offer to pay you or give you a refund claiming they owe you,” Oje said.
— Do not click links in suspicious emails or text messages. “If you’re not sure about the message, don’t reply directly to the sender,” he added. “Go to your money transfer company’s app or website and contact support directly from there.”
