Peer-to-peer transactions—typically accomplished by sending money through a smartphone app—have become ubiquitous. P2P spending is a common way to split checks, repay friends or purchase goods and services, things millions of Americans do every day in lieu of paying with cash or a credit card. But bad actors lurk, meaning users should be on the lookout for payment app scams.
Key Facts
- Total P2P transactions are expected to reach $1.4 trillion in 2023, a 28.5% increase from 2022. Venmo, Cash App and Zelle, the last of which operates on the mobile platforms of some of the country’s largest banks. P2P payments have become a convenient way to send money in an instant.
Consumers also can bypass banks when borrowing money, through peer-to-peer lending. Non-bank companies build up money to lend by attracting individual investors, who may receive larger returns than they’d find elsewhere, although there is risk involved. The investors collect the interest fees a borrower would normally pay to a bank when taking out a loan.
Common P2P Payment Scams
As with other financial transactions, P2P payment scammers are on the hunt to steal your money, identity or both. Common P2P scams include:
- Phishing
- Unauthorized money transfers
- “Accidental transfers,” where a scammer sends you money then claims it was a mistake; if you send the money back, you may later discover the funds sent to you were from a stolen source or fake account
- Impersonation or imposter scams, which often involve someone pretending to be calling from a business, government agency, bank or utility company in order to get access to money or personal information
General P2P Payment Statistics
Many Americans Make P2P Payments
More than 159 million U.S. residents are expected to make at least one P2P mobile payment in 2023 victimized by imposter scams. In a response to Warren’s report, the company indicated that fraud reports have increased as usage of the service has grown.
Imposter Scams Are Among the Most Costly to Consumers
Imposter scams accounted for nearly 15% of all fraud reports to the Federal Trade Commission in the third quarter of 2023. The government received more than 193,000 reports of this type of scam, which includes both P2P and other scams involving imposters.
The top five types of fraud reported to the FTC in 2021 were primarily scam-related, including: imposter scams ($2.3 billion); online shopping scams ($392 million); prizes, sweepstakes and lotteries ($255 million); internet services ($216 million); and business and job opportunities ($206 million) Scammed Out Of Money On Zelle? You Might Be Able To Get It Back
- Apple, PayPal, Other Digital Payment Providers To Face Federal Scrutiny
- Money Transfer App Ordered To Pay $1.4 Million In Refunds To Customers
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