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How to Avoid Money Transfer Scams

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Fraudsters are relentless. As peer-to-peer money transferring has become more popular, so have the schemes that involve their services. Recently, fraudsters have targeted popular platforms known for their quick and seamless money transfer capabilities. 

What is a peer-to-peer (P2P) money transfer?

A peer-to-peer (P2P), also known as person-to-person, money transfer is a financial transaction that occurs directly between individuals without the involvement of a traditional financial institution, such as a bank or credit union. With P2P transfers, you can send money to someone through an app or website. Popular apps and websites include, Zelle, Venmo, Paypal, Cashapp, Apple Pay, and Samsung Pay. 

Here’s how it works: Let’s say you want to send some cash to your friend. You open the P2P app or website and enter your friend’s details, such as their email and phone number. Then you choose how much money you want to send and click the send button. The money gets taken out of your account and goes into your friend’s account. P2P transfers are quick and easy and can be sent to anyone in the world with an account. You don’t have to write a check or go to a bank. You can do it all from your phone or computer. 

Although convenient and helpful, it is important to be aware of potential dangers associated with transfer scams. 

The scams unveiled

Fraudsters employ various tactics to deceive and defraud individuals using transfer services. One common scam involves impersonating a financial institution and sending text messages disguised as alerts regarding unauthorized fund transfers. Through these texts, scammers manipulate the victims into providing crucial usernames and passwords, granting fraudsters access to the victims’ online bank accounts. Once inside, the fraudsters change the password to the account, preventing victims from stopping the fraudulent activity, and swiftly transfer the stolen funds to other accounts.

Another scam has the fraudster again posing as a financial institution and informing the member they must transfer funds to cover losses from a previously unauthorized transaction. This scam is successful because fraudsters typically create an account at the same credit union or bank, and then convince their victim to disconnect their cell phone number from their Zelle account.

This allows the fraudster to steal the phone number and connect it with their newly created account. When the victim attempts to send funds to solve the fake crisis by using their phone number, they will actually be sending money to the fraudster’s account instead.

Preventing Money Transferring Fraud

To safeguard yourself from falling victim to transferring fraud, it is essential to adopt the following preventative measures: 

  1. Don’t rely on caller ID: Scammers can easily copy and spoof phone numbers, making it appear as if a local number is calling or sending you a text your credit union or bank. To verify the legitimacy of a call, hang up and contact your financial institution directly, using their published numbers provided online. Avoid using contact information provided in unsolicited calls or messages. 
  2. Be wary of texts and calls claiming to be a financial institution: Even if a message or call appears to be from your credit union, approach it with caution. Remember that legitimate credit unions will never ask for your card number, username, password, or secure access code through email, text message, or unsolicited calls. Here’s how UCCU protects you from fraud. 
  3. Only use phone numbers published by the financial institution: When contacting your bank or credit union directly, rely only on phone numbers published by the credit union itself. You can find these numbers on official cards, pamphlets, mailers, statements, official customer service lines, or the official website. Avoid using phone numbers provided in suspicious messages or phone calls. 
  4. Be wary of self-transfers using transfer services: Asking victims to use transferring services to send funds to themselves is a common tactic used by fraudsters. Transferring tools are primarily used for “person-to-person” transfers rather than “me-to-me” transfers. If someone you don’t know asks you to perform a self-transfer, exercise caution and refrain from doing so. It is likely a fraudulent attempt. 

By implementing these protective measures, you can significantly reduce the risk of becoming a victim of money transferring fraud. Stay alert, question suspicious communications, and prioritize your online security. Find more tips on avoiding P2P transfer fraud here.

What to do if you Suspect Fraud

If you suspect that you have fallen victim to a transferring scam or notice any fraudulent activity, it is important to act promptly to minimize the potential harm and safeguard your accounts. Follow these steps:

  • Stop any further transactions: If you suspect fraudulent activity, immediately stop any ongoing money transfers or transactions. Take a moment to assess the situation and prevent additional funds from being compromised. 
  • Contact your financial institution: Reach out to your bank or credit union as soon as possible to report the scam or fraudulent activity. Inform them about the situation, provide any relevant details, and follow their instructions on how to proceed. They can guide you on the necessary actions to secure your accounts and potentially recover any lost funds. 
  • Change your passwords: To protect your accounts, change the passwords for your online banking. Money transfer apps, and any other financial platforms you use. Select strong, unique passwords that include a combination of letters, numbers, and special characters. Enable two factor authentication.
  • Monitor your accounts: Regularly monitor your banking apps statements and transaction history for suspicious activity. If you notice any unfamiliar transactions or unfamiliar charges, report them to your financial institution immediately.  Don’t forget to check any account that can transfer money such as a PayPal account or Venmo account.

Remember, time is of the essence when dealing with transferring scams. Taking action quickly increases the likelihood of recovering lost funds and stabilizing the impact on your financial well-being. 

Safeguard Yourself

Money transferring fraud through peer-to-peer apps and websites is a serious threat in the modern digital world. To safeguard yourself from becoming a victim to these scams, it is crucial to remain alert, adopt preventative measures, and act quickly if you suspect any fraudulent activity. By following these steps, you can protect your financial well-being and maintain control over your accounts and funds. Stay up-to-date with other common scams.