PAYID on the nose as scammers target Aussies

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 such as 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.

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.

WHAT IS PAYID?

PAYID is a popular payment system that has been used to transfer funds for more than five years. It is integrated into the online banking systems of all major banks and allows account-holders to send or receive money using just a person’s mobile number or email address.

HOW IS IT USED?

The way that scammers prey on victims is not particularly sophisticated, but relies on people being distracted, timepoor and often lacking in tech literacy. 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.

PAYID will never ask a person to pay a fee to start a business account for starters – it’s a free service.

If someone does ask you to do this – even if it appears to be a legitimate email from PAYID – it is probably a scam. As soon as you press send, there is no coming back. Once you have made the transaction, your bank will be unable to refund any money.

It is not an ideal situation, but many people have turned to using cash as a safer and simpler way to avoid the hassle during marketplace sales.