P2P fraud definition
P2P fraud (or peer-to-peer fraud) is when an individual or a group deceives another person in online transactions through P2P payment apps. P2P apps allow individuals to send and receive money directly from their bank accounts to others. Examples of these apps include PayPal, Venmo, and Zelle. Fraudsters may exploit this payment method in various ways, from getting people to send payments for items they’ll never receive to payment reversals.
See also: scam
Common types of P2P fraud
- Online shopping scams. Someone may advertise a product online (e.g., electronics, clothing) at an attractive price. After receiving payment, they never deliver the item.
- Ticket scams. Fraudsters may sell fake event tickets (e.g., concerts, sports events), leaving the buyers with unusable tickets.
- Rental scams. Cybercriminals may advertise fake rental properties, collect deposits or rent payments, and then disappear, leaving renters with nowhere to stay.
- Overpayment scams. A scammer may overpay for an item you’re selling, then ask you to refund the extra money. The initial payment turns out to be fake, and you’re left out of pocket.
- Fake charities. Fraudsters create fake charitable causes, especially during crises, to collect donations that never go to any real charity work.
- Loan scams. Scammers promise loans with low-interest rates, but they ask for upfront fees or personal information, vanishing after receiving the payment.
- Work-from-home scams. Offers for remote work opportunities that ask for upfront fees or personal information often turn out to be fraudulent.
- Tech support scams. Impersonators claim to be tech support from legitimate companies, asking for access to your computer and payment for ‘services.’
P2P fraud prevention
- Use trusted platforms. Use reputable websites or platforms for P2P transactions with established security measures and user reviews.
- Research sellers/buyers. Research the history and reputation of the seller or buyer before making a transaction. Look for reviews and feedback from other users.
- Research charities before donating. Make sure the charity you’re about to donate to is legitimate by checking the charity’s credentials on watchdog sites.
- Secure payment methods. Use secure and traceable payment methods like credit cards or trusted payment apps that offer fraud protection.
- Beware of urgency. Be cautious of sellers or buyers who create a sense of urgency or pressure you to make quick decisions.