Mobile payment apps are an increasingly popular and convenient way to send and receive money. It’s the new way to pay just about everyone from your hair stylist, to your babysitter, to your best friend. But as with all new technologies, scammers have found a way to capitalize on these apps — and may try to use them to steal your money.

Whether you’re new to mobile payments or you’ve been using these apps for years, you and your money could be at risk. Learn how to spot and protect yourself from common scams.

Mobile Payments 101

There are lots of different mobile payment apps in the marketplace today. Here at Frontwave, we have a peer to peer (P2P) payment system built right inside online banking and the Frontwave mobile app. Some other third-party examples of mobile payment apps include Venmo, CashApp and Zelle.

In general, these all work in a similar way. You create an account on the app (or login through online banking, in the case of Frontwave P2P payments) and link it to your bank account or credit card. Then you can use the app to send money to others, usually by entering the person’s email address, phone number and/or username on the app. People can also pay you. The money you’re paid typically stays in your account on the app until you request a deposit into your bank account or use your balance to pay someone else.
 

Common Mobile Payment Scams

You might think the only way to get money out of someone’s mobile payment account would be for a scammer to hack their way in. But the truth is, that kind of fraud is much less common than scammers tricking people into sending them money or sharing login information.

Scammers make up all kinds of stories to swindle people out of their hard-earned money. For example, they may lie and say:

• you won a prize or a sweepstakes and need to pay some fees to collect it
• a loved one is in trouble and they need you to send money
• you owe taxes to the IRS
• they’re from tech support and need money to fix a problem with your computer
• they’re someone who is romantically interested in you and needs some money
• they’re collecting money for charity
• they're from your bank's fraud department and need you to verify a code to confirm your identity (this is a scam designed to gain access to your account).

Tips for Protecting Yourself and Your Money

In many cases, once you send money via mobile payment app, you can’t get it back. With Frontwave P2P payments, you can cancel a payment if the person hasn’t accepted it yet — but a fraudster is likely to take their money as soon as it’s available. Third-party apps may not offer much in the way of fraud protection either.

If you choose to use mobile payment apps, be sure to take steps to protect yourself and your bank account from being swindled:

• Be wary of any business that only accepts P2P payment apps. Consider this a red flag.
• If you get an unexpected call, text or email from someone who says they represent a company or a government agency and need payment via a P2P app, contact the phone number on your account statement or on the company's or government agency's website to verify the authenticity of the request.
• Before donating with a P2P app, always check the charity's website to verify that they accept donations through that app.
• Never send P2P payments to — or accept payments from — someone you don't know well.
• Always create strong, unique passwords and disable automatic logins. When possible, use multi-factor or biometric authentication.
• Never provide sensitive personal information via email or text, or over the phone. Legitimate customer support operations will not ask for your bank account information. This goes for Frontwave, too. We will never email, call, or text our members and ask for personal information such as online banking credentials, your card number, CVV or social security number. And we’ll never send you a text or email with a code you need to verify. If someone asks you for this, they may be trying to gain access to your online banking information by resetting your password. Do not give the caller this code. Instead, hang up and report the incident to Frontwave using the phone numbers listed on this website.

If you think you may have sent money to a scammer, report the scam to the mobile payment app (or Frontwave, if you’ve used our P2P payment system) right away. Then, report it to the Federal Trade Commission.

Want to learn more about avoiding common financial scams? Check out our infographic on 5 Ways Scammers Try to Steal Your Financial Information.