Whether you use Zelle, Venmo, or Paypal, peer-to-peer (P2P) cash apps are an incredibly convenient way to transfer money from your bank account to someone else's. But that convenience comes at a price… These apps are not federally insured or regulated the way credit card companies are, which means they don't offer much in the way of protection to their customers.

As the ever-evolving risk of scams continue to infiltrate the tech world, cash apps are no exception. If a scammer is successful in tricking you into sending payment over a cash app, the payment is pretty much instant and irreversible. That's why it's important to stay informed and vigilant about these three common cash app scams.

Seller Scams

This refers to scammers who impersonate someone offering legitimate goods or services in exchange for advanced payments via cash apps. The usual ways they initiate contact with their victims are via phone call, email, or online advertising. Of course, after the "advanced payment" or deposit has been sent, their victims will never hear from them again, and their money is as good as gone.

Pro tip: Never use a cash app to pay for goods or services, especially before you've received them. Always opt for a more secure payment method like a credit card.

Unauthorized Transfers

These refer to transactions made on your account or device that you did not approve. They are generally a result of scammers using "phishing" tactics to obtain their victims' personal information and hack into their P2P or bank accounts. How are scammers able to do this, you might wonder? Often times, they will send out links via email or SMS that, when clicked, can result in malware downloading onto your device and exposing your private information. If these unauthorized transfers escalate, they can lead to full on financial and identity theft.

Pro tip: Never click on a link in an email or text message from an unknown sender, regardless of how much they try to entice you! That "free gift card" they're offering you will more than likely end up as their own.

Bank Impersonators

This refers to scammers impersonating your bank and pretending that there has been suspicious activity in your account. These fraudsters have been known to request that you send them money to ensure your account has not been disabled or to solve the problems of the suspicious activity. In reality, the only thing suspicious going on is this interaction!

Pro tip: Never entertain these calls, texts, or emails before first calling your bank directly to verify if anything is actually wrong with your account.

More Tips to Protect Yourself

1. If an unknown number calls or texts you, use Whois by SIPSTACK to check their rating and level of safety before you decide to respond.
2. If you find out the number does belong to a scammer, rate and review it in the Whois portal, so members of your community can protect themselves as well.
3. Create an account and verify your number with Whois. This will put you on the "Do Not Call List" from verified spam numbers and other unwanted telemarketers.
4. Keep your cash app updated to provide enhancements to its level of security.
5. As a general rule of thumb, only send money to people you know and trust via cash apps.
6. Take your time when sending a payment. Money is transferred quickly using P2P apps, and scammers often prey on your emotions with a false sense of urgency. Don't fall for it! Make sure to verify everything 100% before transferring any money.
7. Make a habit of monitoring your bank accounts regularly to make sure there is no unusual charges or activity. This includes signing up for alerts with your bank, credit card company, and other financial institutions, which will notify you when any unusual activity takes place.
8. If you've been scammed on a payment app, report the issue ASAP to the P2P company, your bank, and your credit card company. It is also advised to promptly change your username, password, and security questions on your accounts.

How SIPSTACK Fights Fraud

Using the latest technology and machine learning, SIPSTACK's systems authenticate all activity in real time against variables that affect your security. When a carrier implements SIPSTACK's Smart CNAM, they are able to customize a threshold for calls to pass through, based on their specific needs. Additionally, Whois by Sipstack is the biggest and best AI-powered reverse lookup database that individuals can use to help eradicate spam. At SIPSTACK, we take an active role in ensuring we are building a secure and connected tomorrow. Contact us today to learn how you can protect yourself from spam.