Zelle, Venmo, or Cash App? Why scammers love P2P apps

A woman checking her P2P app before sending money.

Payment apps can be very convenient––as long as you don’t send money to a scammer. Recovering your money may be harder than you think.

If you need to send money to your kids at college or to your parents who live far away, no worries. You can send them the money instantly using the P2P app of your choice. P2P app adoption has been rising steadily, and it’s expected to continue to do so. After all, it just makes things that much easier.

However, scammers have also found it very convenient to receive money instantly from their victims. Around 8% of all banking customers reported being victimized by a P2P scam from April 2023 to April 2024. And though Zelle scams usually take center stage, these types of scams are not limited to a single app.

What is a P2P scam

A P2P scam is any fraudulent activity conducted via peer-to-peer payment systems, including apps like Venmo, PayPal, Zelle, and Cash App. The scammer might pose as someone their target trusts or a legitimate entity, creating a sense of urgency to manipulate the target into sending them money.

P2P’s key feature is enabling users to send money instantly—more specifically, cash. It’s like giving a $20 bill to a person you know. What this means is that you may have a record of the transaction, but at the end of the day, you’re sending the digital version of cold hard cash.

Protections are limited

In comparison to credit card transactions, P2P transactions aren’t afforded the same level of protections. One of the reasons for this is that reversing a near-instant payment is challenging. These platforms are made for fast money movement and often the transactions are considered final.

The other reason is that banks are not required to reimburse the money if the target willingly sent it. Some banks offer limited protection for Zelle users, especially if the transaction is reported quickly and there is evidence of fraud. The Electronic Fund Transfer Act (EFTA) does offer some protections for unauthorized electronic fund transfers, but it may not cover authorized payments made to scammers.

Common P2P scams

All P2P apps can be used to defraud people. Most of the P2P scammers impersonate a person or an entity to request payment. They will try to persuade you to pay them via a P2P app and disappear once they have your money.

  • Phishing scams: The scammer sends a fake email or text message that appears to be from Zelle or a bank, asking for login details or encouraging the victim to make a payment.
  • Overpayment scams: The scammer sends a fake check, "overpays" for an item, and asks for the excess amount to be returned via a P2P app.
  • Fake invoices: The scammers send a fake invoice and insist on getting paid via P2P app.
  • Romance scams: Often found on dating platforms, where the scammer builds a relationship and then asks for money.
  • Online marketplace scams: Scammers pose as buyers or sellers on platforms like Craigslist or Facebook Marketplace and request payment via P2P app.

Protecting your money

We can’t control a scammer’s actions, but we can be on the lookout for potential red flags.

  • Verify the contact information. Always confirm the identity of the person or business you’re sending money to. If it’s a business, make sure you send the payment to a P2P business account.
  • Be skeptical when they insist you use a P2P as payment method. Scammers often create a sense of urgency. Take your time to verify the request.
  • Consider other payment methods. If you aren’t that acquainted with a seller, pay using a credit card.
  • Use secure network. Avoid using public Wi-Fi when making financial transactions. If you need to, use a VPN.
  • Enable security features. Utilize two-factor authentication and other security features offered by your P2P service.
  • Monitor your accounts. Before making a payment, take a look at your bank and P2P accounts for any unusual activity.

What to do if you fall for a P2P scam

Recovering your money may be difficult, but it’s important to try. Act quickly.

  • Report the scam. Notify your bank and the P2P platform immediately. Check if there’s a chance you can be reimbursed.
  • Contact authorities. Report the scam to agencies like the FTC, the Internet Crime Complaint Center, and your local police.
  • Reach out to consumer protection agencies. The Consumer Financial Protection Bureau is an agency that may be able to offer additional support.

Recognize a scammer’s ploy

P2P payment systems bring convenience and simplicity, but it’s crucial to stay vigilant against scams. By understanding how these scams work and following protective measures, you can safeguard your hard-earned money.

  • Nyrmah J. Reina
  • Managing Editor
Nyrmah J. Reina is a writer and managing editor for the company’s lifestyle blogs. She covers online safety and cybersecurity topics.

Editorial note: Our articles provide educational information for you. Our offerings may not cover or protect against every type of crime, fraud, or threat we write about. Our goal is to increase awareness about Cyber Safety. Please review complete Terms during enrollment or setup. Remember that no one can prevent all identity theft or cybercrime, and that LifeLock does not monitor all transactions at all businesses. The Norton and LifeLock brands are part of Gen Digital Inc. 


    Want more?

    Follow us for all the latest news, tips and updates.