Steer Clear of Person-to-Person (P2P) Payment Scams

It’s great to have the convenience of person-to-person (P2P) payment services, but any time there’s money involved, you can be sure fraudsters are not far behind. That’s why it’s important to know how to use them wisely.

How They Work 

There are many P2P payment services on the market today. They use a technology that allows you to transfer money from your bank account or credit card to another person’s account using their email address or cell phone number. When you need to pay your babysitter or split the lunch tab with a friend, you input their name and the dollar amount and hit send. It’s that simple.

Guarding Against Scammers

While P2P payment services makes transferring money to family and friends a breeze, many of them aren’t safe to use with people you don’t know or trust. For instance, SchoolsFirst FCU’s mobile banking app offers Zelle®, a free payment service that lets you transfer money to friends and family who live in the U.S. However, Zelle and some other services like it don’t have a payment protection program, so you shouldn’t use them for transactions such as selling or buying goods and services to or from strangers. For example, if you buy something like concert tickets and then make a payment to a scammer, they can take the money, close their account and you never get your tickets.

Sometimes scammers will buy merchandise from sellers using hacked credit cards or bank accounts. Although the sellers will wait until the payment posts to their accounts before mailing purchases, thieves will then reverse the payments and steal the victims’ cash and merchandise.

If you are a regular online shopper and want to use a P2P payment solution for buying and selling, look for one that offers payment protections. Make sure you read the terms of service that explains these consumer protections, as well as fees, privacy policies and dispute resolution services. And if you download P2P apps, get them from trusted sources such as the Apple App Store or Google Play. Read The Best P2P Payment Services of 2018 to learn more about your options.

Account Takeovers

Another way fraudsters are exploiting P2P payment services is via account takeovers. They gain access to accounts by stealing personal information, then changing passwords, and transferring funds out. That’s why it’s important to safeguard your accounts with strong passwords and enhanced security. For instance, SchoolsFirst FCU allows you to select a code word to add to your accounts. Then when you contact the Credit Union, even over chat, you must provide the code word. Never share passwords, PINs or codes with anyone. That way, if a fraudster calls to try and change your password, while they may have your account number or Social Security number, they’ll be thwarted when asked for your code word.

Watch the Fees

 Although some consumers feel more comfortable using a credit card with P2P payments because it lowers their liability if fraud occurs, many free P2P payment solutions don’t offer this option. If you use a credit card, make sure you understand the fees associated with it. In most instances, the cost is around 3% per transaction.

 Knowledge is Power

The Federal Trade Commission provides scam alerts that help you recognize the warning signs and avoid becoming a victim of fraud and identity theft. View their latest alerts. And read about Four Scams to Watch Out for in 2019.


When you click on external links, you are linking to alternate websites not operated by SchoolsFirst FCU, and SchoolsFirst FCU is not responsible for the content of the alternate websites. The fact that there is a link from SchoolsFirst FCU’s email to an alternate website does not constitute endorsement of any product, service, or organization. SchoolsFirst FCU does not represent either you or the website operator if you enter into a transaction. Privacy and security policies may differ from those practiced by SchoolsFirst FCU, and you should review the alternate website’s policies.

Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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