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How to Avoid Being Scammed When Transferring Money

Mar 17, 2023
Frustrated woman worried about being scammed when transferring her money from financial institutions and different accounts.

We've all been there. You go to dinner with a group of friends and one person pays the bill. Then, everyone else pays their share of the bill with a money transfer app. Super convenient. No one needs to worry about carrying cash or splitting checks anymore, but what should you worry about? 

With payments capable of moving in a matter of seconds, it’s more important than ever to understand how fraudsters operate in order to avoid falling prey to schemes. As people become better at recognizing fraudulent activities, scammers are also improving their methods. This is why it’s important to recognize how scammers are trying to defraud your hard-earned money.

Since it might be complicated to trace many of these scams, your best protection is learning to spot potential fraudulent acts when you encounter them and how to send funds safely. Take a moment to read this blog and learn how you can help safeguard your money and your information.



Common Money Transfer Scams

1. Fake messages sent from scammers 

Fake login pages and other phishing emails and texts are popular tools used by scammers to get your money. The message will often claim that you have received a payment. Unfortunately, once you click on the link, you are instead directed to a website that steals your login information so scammers now have access to steal the money in your linked accounts. The text and emails use wording and even email addresses that make them look legitimate. The scammers can copy legitimate company logos and overall formatting to capture a victim's information. 


2. “Accidentally” receiving money from a stranger

Scammers will actually go as far as to send you money then contact you to say it was a mistake and ask for a refund. The scam occurs when they ask you to issue a refund to a different account. The key to the scam is that the “accidental” money was sent to you via a stolen credit card. When the credit card owner discovers the issue and files a complaint with the credit card company, the deposit amount is then taken out of your account and your money is used to pay back the stolen amount from the original victim.  

3. Fraud alerts from your credit union or bank that are fake

Often pretending to be representatives from your credit union or bank, these scammers send fake fraud alerts indicating that your account has been compromised. They direct you to transfer your money to an account they say is secure and that you should use your mobile payment app to do so. Your money is then sent directly to the scammers. It is easy to get caught in this scam when the text or email uses wording like "suspicious log-in attempt" to make the victim feel a sense of panic.



Tips for Using Money Transfer Apps Safely

Treat app payments like cash

It is important to understand that if you lose money via a mobile payment app, it is equivalent to losing cash because it typically cannot be canceled, and chances are high that you will not have the money refunded to you. 


Make sure you are sending money to the right person

As simple as it sounds, sending money to the wrong person is not uncommon. When sending money via a cash app, be sure to confirm the account name before you hit send. Many accounts have names that are very similar, which can cause an issue if you are not careful. Once the money is sent, it cannot be easily canceled. Before sending money, let the intended recipient know that you are about to transfer funds so they can keep an eye out and confirm when they safely receive the funds. 


Make sure you double-check the amount

What could be worse than sending $1,500 when you intended to send $15.00? Double-checking the amount you are sending before you hit send is always a good practice. This might not be a big deal if you are sending money to a friend or family member, but if you are paying for a service or buying goods from a business, recovering your excess amount may not be easy. It is always a good idea to confirm the amount when you send money, as you will not be able to change it after payment is sent.

Know your app policies 

There are a variety of money transfer apps available. While the wording is boring and doesn't make for a fun read, it is worth the time and effort for you to read over the protection and disclaimers before you commit to using a specific app. Check the fraud protection measures they have in place to make sure you are covered in the event of fraud. Also, be aware of the transaction fees associated with using the app so you know exactly where your money is going. 

Use the in-app security features 

Using the latest version of your mobile payment app is key to ensuring you are protected by up-to-date security features. In addition, be sure to enable all available security features to provide the highest level of security for your money and accounts. Some apps will allow you to use a PIN to secure your account, which is a great feature. We know, it can get super annoying when an app wants to send you a verification code to your email or text, but rest assured these extra steps are meant to help keep you and your money safe. 


Pay it safe with Zelle®

Why choose Zelle​® as your P2P payment app? In a nutshell, if you’re going to use a P2P payment app, be sure to set up some security measures first to ensure your money’s safe. Again, it’s best to send money only to people you personally know and trust. 

Banks and credit unions like CCCU offer Zelle​® in their mobile banking app (and in online banking)! Zelle​® is a fast and free* way to send money to friends and family. Plus, when you use Zelle​® through your mobile banking app, you can rest assured knowing your information is protected with the same technology your bank or credit union uses to keep your account(s) safe. 



What to Do if You Fall Victim to a Scam


1. Try to cancel the payment

When it comes to online scams, time is money (literally). We are naturally inclined to get upset, panic, and maybe even rant a little. While these feelings are valid and justified, make sure to first get the ball rolling on a potential solution. Quickly attempt to cancel the payment by locating the fraudulent payment transaction and clicking “cancel”. Typically, if this option is available, your money can still be refunded.


2. Inform your credit union or bank of the fraudulent activity

Contact the fraud department of your credit union or bank to let them know what happened. If your mobile payment app is linked to a debit or credit card, dispute the transaction with your bank or credit union. If you have been a victim of phishing, make sure to let your credit union or bank know that your account information has been compromised. They may need to close your current accounts and freeze your funds until they can reissue a new card and account.


3. Report the transaction as a scam 

Report the scam via your mobile payment app using the correct link and follow the instructions about what you can do to ensure they are aware of the payment issue. It is also a good idea to get on the phone and contact the app's customer service department so they can also document your incident. 


4. File a police report 

Some apps require that you file a police report when you are the victim of a scam to help resolve fraudulent transactions. Your local law enforcement’s non-emergency number can connect you to the fraud department for assistance. 


Safeguard your money year-round with CCCU

CCCU is committed to securing your finances and keeping your personal information safe. We take several steps to protect our members' accounts, including multi-layer login authentication, Secure Socket Layer (SSL) encryption, 24/7 monitoring, and continual cybersecurity updates. 

While we work year-round to safeguard your money, we need your help! Since third-party mobile payment apps are not NCUA-insured like your credit union accounts, it is crucial to be vigilant and protect yourself against deceptive tactics such as these. Be careful when making online purchases and do your research before doing business with a seller or meeting someone on an app. If someone you’ve never met in person asks you to accept money on their behalf, you should pause and consider whether this is smart. If something doesn’t feel right, follow your instincts and simply refuse to do the transaction.

We're here for you. CCCU proudly serves people who live, work, worship, own a business, or attend school across 8 counties in Oregon and Washington. We have physical branches located in Portland and Hood River, convenient mobile banking, plus access to 5,600+ CO-OP Shared Branches and over 30,000 surcharge-free CO-OP ATMs nationwide.

Join CCCU today!

* U.S. checking or savings account required to use Zelle​®. Transactions between enrolled consumers typically occur in minutes and generally do not incur transaction fees.
Zelle​® and the Zelle​® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.