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Financial Crime

Everything you need to know about instant payment financial fraud 

· 5 minute read

· 5 minute read

Jump to:

border icon  How instant payment apps work

 Common types of payment app fraud

 Preventing instant payment app fraud

 What to do if you’re a victim of instant payment app fraud


In the era of digital convenience, instant payment apps like Venmo, Zelle, and Cash App have become indispensable tools for quick and easy money transfers. However, the popularity of these apps has also caught the attention of cyber-criminals, leading to a rise in instant payment app scams. 

How instant payment apps work

App services like Venmo, Zelle, and Cash App allow users to transfer money quickly and easily, without using cash or traditional bank transfers.  Users simply sign up and connect their bank account to create an account.  When they want to send money, they just type in the recipient’s name, email address, or phone number and the amount they want to send. The recipient promptly gets a notification and can accept the funds. 

While these apps offer unparalleled accessibility, there are potential risks associated with their use.  Cyber-criminals have taken notice of the widespread adoption of these apps and are creating more and more complex scams to trick unsuspecting users. 

Common types of payment app fraud

Fake buyer or seller – In these scams, a fraudster creates a fake profile on a payment app and uses it to buy or sell items. They will then either never send the item after receiving payment or send a counterfeit item. 

Advance-fee – In this type of fraud, the victim sends the money upfront for a product or service that will never be delivered. 

Overpayment – Another way of financial fraud is when a scammer sends the victim more money than they are owed and then asks the victim to send back the difference. The scammer will then cancel the original payment, leaving the victim with a negative balance in their account. 

Fake check – In check scams, the fraudster sends the victim a fake check and asks them to deposit it and then send back a portion of the money. The check will then bounce, leaving the victim with a negative balance in their account. 

Identity theft – Make sure you don’t share your personal information! A cyber-criminal uses a victim’s personal information to open an account on an instant payment app and then uses it to make fraudulent transactions. 

Preventing instant payment app fraud

Use strong passwords and enable two-factor authentication.  Create robust passwords for your payment app accounts and avoid using the same password for multiple accounts. Additionally, enable two-factor authentication, which adds an extra layer of security by requiring a second form of identification, such as a code sent to your phone, when logging in or making transactions. 

Never share your login credentials.  Keep your login credentials, including your username, password, and PIN, strictly confidential. Never share this information with anyone, even if they claim to be from the company operating the instant payment app. 

Be wary of phishing scams. Phishing scams involve fraudulent emails or text messages designed to deceive you into revealing your personal information or clicking on malicious links. Be cautious of any unsolicited messages requesting your login details or payment information. Always verify the sender’s email address or phone number and avoid clicking on suspicious links or opening attachments. 

Only send money to people you know and trust.  Before sending money, ensure you know and trust the recipient. Verify the recipient’s identity by checking their email address or phone number and confirm the transaction details before proceeding. 

Review your transaction history regularly. Regularly review your app transaction history to identify any unauthorized or suspicious activities. If you notice any discrepancies, report them immediately to your bank or the app provider. 

By following these preventive measures, you can significantly reduce the risk of falling victim to instant payment app fraud, ensuring the security of your finances and personal information. 

What to do if you if you’re a victim of instant payment

If you’re unfortunate enough to discover that you’re the victim of payment app fraud, there are several steps you should take immediately: 

  • Contact your bank and inform them of the situation. They may be able to help you recover your funds and secure your account.   
  • Change the passwords for all your online accounts, especially your payment app account. Enable two-factor authentication to add an extra layer of security.  
  • Check your bank and credit card statements for any unauthorized transactions. If you find any, report them to your bank immediately.  
  • Protect yourself and others from having the same fate by filing a complaint with the Federal Trade Commission (FTC) to report the fraud and help law enforcement track down the criminals responsible. 

 Learn more about fighting financial crime from Thomson Reuters. 


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