The Most Common Peer-to-Peer Payment Scams to Look Out For

Peer-to-peer (P2P) payment platforms offer a convenient way to send money directly between individuals without needing a bank as an intermediary. Yet, this convenience also opens doors for fraudsters to exploit unsuspecting users. In this blog, we will delve into the common types of P2P payment scams and offer actionable advice to help protect your transactions.

Frequent Scams

Bank Impersonation Scams

One common tactic scammers employ is to impersonate your bank. Victims receive calls or text messages that appear to be from their bank, claiming there have been unauthorized transactions or issues with their account. These scammers ask for personal information or instruct victims to transfer funds to a supposed secure account to protect their money. Unfortunately, these transfers send funds directly to the scammer. It is crucial to remember that banks will never ask you to secure your account by transferring funds.

Fake Job Scams

The job market can be challenging, and scammers exploit this vulnerability. In fake job scams, you might receive an unsolicited job offer that requires you to purchase equipment or supplies. The scammer “covers” these expenses by sending you a check and instructs you to send a portion of it back. Later, when the check bounces, you are left liable for the full amount, having lost the money sent to the scammer.

Emergency or Romance Scams

Scammers also prey on emotions like fear or love. In emergency scams, they pose as a loved one in crisis, urgently requesting money. Romance scams involve a similar tactic, with the scammer forging a romantic connection online and then urgently requesting money for a supposed emergency. It’s important to verify the identity of the person making such urgent requests directly.

Overpayment and Marketplace Scams

Common in online marketplaces like Craigslist or Facebook Marketplace, these scams involve a buyer who “accidentally” overpays using a fraudulent source. The buyer then asks the seller to refund the excess amount. When the initial payment fails to clear, the seller is out both the refund and the item.

Ticket Purchasing Scams

Event tickets are another common area for scams. Scammers advertise tickets for events that are either nonexistent or sold out and disappear once the transaction is complete.

Refund and Recovery Scams

Victims of previous scams are often targeted again. Scammers promise to help recover lost funds for a fee, exploiting the victim’s desire to regain some of their losses. Unfortunately, this only leads to further financial loss.

Craigslist and Rental Scams

Scams on platforms like Craigslist also extend to rental markets. Scammers ask for deposits or advance payments for rentals or items that simply do not exist, leaving the victim out of pocket when they find out it’s a scam.

Best Practices to Avoid Scams

Verify Identities

Always ensure you know who you are dealing with. Verify the identity of any individual or organization before proceeding with transactions, especially in situations involving money. Here are some tips and strategies on how to verify identities:

  • Contact the Person Directly: If you receive a payment request from someone you know, such as a friend or family member, contact them directly through a trusted method. Use a phone number or email address you already have on file rather than any contact details in the suspicious message or payment request.
  • Use Known Contact Information: When dealing with businesses or service providers, always use contact information from their official website or your past communications. Avoid using any numbers or links sent in an unsolicited message.
  • Request a Video Call: If the transaction involves significant sums or requires additional verification, request a brief video call with the contact. This is particularly useful in situations involving new contacts or where a person’s identity cannot be easily confirmed through other means.
  • Check Online Presence: Research the person or the business online. A legitimate business will likely have a professional online presence, including a website, social media profiles, and reviews.
  • Ask Personal Questions: If you’re trying to verify the identity of someone you know, ask them questions only the real person would know the answer to. This could be details about shared experiences or previous conversations.

Avoid Unsolicited Contacts

Be wary of clicking on links or responding to unexpected emails, calls, or messages. These are often fronts for phishing attempts designed to extract personal information.

Be Wary of Urgent or Overpayment Requests

Urgency and overpayment are red flags in any transaction. Scammers often create a sense of urgency to cloud judgment or use overpayments to perform the classic scams seen in marketplaces and job offer scams.

Use Secure Transaction Methods

When dealing with strangers, particularly in online marketplaces, it’s essential to use secure and traceable transaction methods. Reserve the use of instant money transfer services for situations where you are familiar with the recipient’s identity. If you’re unsure about using instant money transfers with unfamiliar parties, consider these secure alternatives:

Credit Card Payment

Credit cards can be a reliable option for online payments. They often include fraud protection and the possibility to dispute charges if your purchase doesn’t arrive or if there are issues with the transaction.

Escrow Services

Consider using an escrow service for higher-value transactions, such as purchasing expensive goods or services from unknown parties. Escrow services hold the money until the buyer confirms the goods have been received in the agreed-upon condition, ensuring that both parties are satisfied before the funds are released.

Payment Services with Buyer Protection

Services that offer buyer protection can help you get your money back if there’s a problem with your purchase. These protections usually cover unauthorized transactions, item non-delivery, or cases where items received are significantly different from the description. Always check the terms of service to understand the extent of protection provided.

Key Takeaways

As peer-to-peer payment platforms continue to grow in popularity, so too does the sophistication of scams exploiting them. By staying informed and vigilant, and following the best practices outlined above, you can protect yourself from becoming a victim. Remember, when it comes to online transactions, if something feels off, it’s always better to err on the side of caution.


1.What are peer-to-peer payments?

Peer-to-peer (P2P) payments are digital transactions that allow individuals to transfer funds from their bank account or credit card directly to another individual’s account via an online or mobile app. These platforms bypass traditional banking mechanisms, enabling quick and easy money transfers without the need for physical bank visits or handling cash.

2. What are peer-to-peer payment scams?

Peer-to-peer payment scams occur when scammers use digital payment platforms to trick individuals into sending money under false pretenses.

3. What are refund and recovery scams?

Scammers contact victims of previous scams, offering to recover lost money for a fee. However, these recovery services are often scams themselves, aiming to exploit victims further by taking their money without providing any recovery services.

4. How can I verify the identity of someone I’m transacting with online?

For personal transactions, try to deal with people you know. For transactions with strangers, use secure and traceable payment methods, avoid sharing excessive personal information, and conduct transactions through platforms that offer buyer protection.

5. What are the best practices to secure my transactions on P2P platforms?

Use strong, unique passwords for your accounts, enable two-factor authentication, and keep your app and device software up to date. Always verify the recipient’s identity before sending money, and be cautious of unsolicited requests or pressure to act quickly.