Learn how to avoid scams on payment apps like Paypal

As a frequent Paypal user, I wasn’t surprised to see a payment request on the app pop up. But when I read it, I knew something was wrong.

In the message, a stranger asked me to send them $699 in order to get a “refund.” While I instantly recognized the request as a scam, I still felt vulnerable; I didn’t immediately see any obvious way to flag the request as a scam, and with just one click, I could have accidentally sent this stranger a huge chunk of money.

Fraud prevention experts recommend these strategies to keep your money safe.

Only send money to people you know

Generally, peer-to-peer payment apps are designed to send money between friends — not strangers. If you use them to send money to someone you don’t know, then you put yourself at risk for fraud.

“You shouldn’t send money unless you’ve met people in real life and know who you are sending money to. If you do that, and you’re careful in terms of what number you are sending money to, these apps can be a convenient, safe and efficient way to move money,” says Paul Benda, senior vice president of operational risk and cybersecurity at the American Bankers Association, a trade association for the banking industry.

Use cash and credit cards in higher-risk situations

If you need to exchange money for goods or services with someone you don’t know, the safest way to do that is through cash or credit cards, says Axton Betz-hamilton, an assistant professor in the School of Health and Consumer Sciences at South Dakota State University.

Credit cards, for example, come with fraud protection attached.

While stolen cash can be harder to recover, it may be covered by homeowners and renters insurance policies (up to your policy’s limit and depending on your policy).

Be wary of texts, calls or unsolicited requests

Frauds are often perpetrated when scam artists send a text, phone call or other kind of message urging you to send money, perhaps claiming you are due a refund or late on a bill.

A cybercriminal might impersonate the IRS or FBI and ask you to send a peerto-peer payment immediately to satisfy a debt, but Joel Williquette, senior vice president of operational risk policy at Independent Community Bankers of America, says legitimate agencies will never contact you by text or call your cellphone with an urgent request for money.

“Typically, they will send you a letter,” he says, and they don’t ask for payment through apps or gift cards — another red flag.

Upgrade your cyber hygiene

Enabling two-factor authentication on financial accounts, adding a pin lock to your phone and using unique passwords that are at least 12 characters long can help keep you safe, Eva Velasquez, president and CEO of the Identity Theft Resource Center, says.

In addition, she suggests setting your app privacy settings to the most private option to minimize the amount of information about you that’s publicly available.

Flag fraud attempts

According to Paypal, if you receive a payment request like the one I got, you should cancel the request without paying. Additionally, you can take a screenshot and forward it to phishing@ paypal.com. Paypal adds that you should not reply, open links, download attachments or call any phone number included in the request.

If you mistakenly disclosed any financial or personal data to a scam artist, Paypal says you should change your password immediately, alert your bank and report any unauthorized payments to Paypal. You can also report your fraud to the Federal Trade Commission at reportfraud.ftc.gov.