PayID scam hurting sellers

A common trick used by scammers is turning people off a handy payment system used by millions.

PayID scams often crop up when someone tries to sell something on a sale service like Facebook Marketplace or Gumtree.

Australians lost $260,000 to PayID-specific impersonation scams last year, according to Scamwatch, but the true number is likely much higher given many scams go unreported.

It is fast becoming a hazard of the booming resale market in Australian cities as sellers fend off a flood of suspicious buyers and often refuse any payment method besides cash.

NAB fraud expert Chris Sheehan said these kinds of scams were “far and away the most significant issue in terms of the sheer number of cases”.

Contrary to the perception of many people who frequent second-hand sale websites, PayID is a “very safe and reliable” payment method when used safely, according to Mr Sheehan.

“But like anything, criminals will find a way to exploit it,” he said.

PayID is a payment system that has been used to transfer funds for more than five years. It allows account holders to send or receive money using just a person’s mobile number or email address.

The way scammers prey on victims relies on people being distracted, time poor and lacking tech literacy.

“I hear it all the time,” Mr Sheehan said.

“You’re trying to sell a bunch of stuff online and just get inundated by people saying, ‘Oh, yeah, I’ll send my relative around to pick it up’.”

They typically follow up by saying they would like the payment to be made using PayID but need to set up a business account before asking the seller to cover the cost.

“It’s absolute garbage, not true at all,” Mr Sheehan said.