Payment Apps and Fraud?

There are lots of ways to get scammed out of money these days, but it is happening frequently with payment apps.  In a way, it had to happen, because just as sure as someone builds a better mousetrap, you’ll find better mice. 

Pew Research found that 13 percent of payment app users realized they had sent money to scammers and 11 percent reported that their account had been hacked.

“Authorized transactions” are the challenge.  If you authorize a transaction and unwittingly sending money to a scammer, you’ll probably never see the money again.

One common tactic is to text someone pretending to be a bank or other authority like a tax collector, and then asking an account owner to make a transfer. A scammer might claim that you will get hit with overdraft fees or other penalties if you don’t pay up.

They might ask you to click on a link where you will then reveal banking information. They might claim that you’re simply moving money from one of your accounts to another account that you supposedly own. In reality, the scammer probably owns or can at least access the account.

With scammed funds, banks find themselves in a tight spot: They’re obligated to approve any transfer that the account holder makes.


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