Morgan Stanley
Wealth Management
Online Security

Peer-to-Peer (P2P) Payment Scams

More and more people are using mobile payment apps like Zelle®, Venmo® or CashApp®. P2P payments can make splitting the bill or paying for a service simple and convenient, but vigilance is key.

How P2P Scams Work

You’ve been looking for a beach-front property to rent over the holiday weekend to no avail. Then, you see a post on a social media page advertising your family’s dream rental. You want to snag it before someone else does, so you strike up an email correspondence with the owner and send over the down payment requested via a P2P app. After that, all communication ceases and you’re left with no vacation rental or way to retrieve your money.

1

Fraudsters like utilizing P2P apps in their scams because the transactions are often instantaneous and irreversible. 

2

P2P apps are designed for users who know and trust each other — and those are the only circumstances under which you should use them.

Action Steps to Prevent P2P Scams

If you’ve fallen for a P2P Scam, there’s a good chance that your funds are lost for good, but it’s still important to respond quickly to limit damage and help others from being similarly targeted.
  1. 1
    Contact Your Financial Institution

    Immediately contact the P2P app or your financial institution to explain that the transaction was fraudulent and seek assistance with retrieval.
  2. 2
    Report Your Situation

    If you do not receive the support you need, contact the Consumer Financial Protection Bureau at consumerfinance.gov and file a complaint.

Tips and Best Practices

P2P payment scams are becoming more sophisticated and trickier to distinguish. Here are some tips and best practices to help avoid these types of scams.

DO

Do read the fine print of the app’s terms and conditions. Review their fraud protection policies and how they will help you recover payments if something goes wrong.

DON’T

Don't send or accept P2P payments from someone you don’t know. Consider asking your friend to send you a request first to ensure you are exchanging funds with the right person.

DO

Do link your payment app to a credit card rather than a debit card to take advantage of greater fraud protections.

DON’T

Don't send money to a charity via a P2P app before reviewing the charity’s legitimate website and confirming they accept donations that way.

DO

Do double check the payment recipient’s information. Look out for incorrect phone numbers or misspellings to be sure your funds are going to the right person.

DON'T

Don't reuse the same password for your P2P app or bank account that you use elsewhere. Always create unique, strong passwords, enable multi-factor authentication, disable automatic logins and keep your apps up-to-date.

DO

Do think twice about businesses that only accept payment via P2P apps — this could be a warning sign.

DON'T

Don't make your P2P payment transactions visible to the public. This could give fraudsters intel to target you better in the future.

Report an Online Security Concern

Contact us immediately at 888-454-3965 if you:

• Believe you may be the victim of fraud or identity theft
• Suspect your phone or email have been compromised
• Notice suspicious account activity
• Receive a questionable email or text that appears to be from Morgan Stanley

We’re open 24/7 to help you. For international clients, please contact your Morgan Stanley Client Representative immediately to report any online fraud or security concerns.

Other Scams to Be Aware Of

Wealth Management Tech Support Scams Fraud artists are savvy and can be very convincing. The Tech Support Scam is a popular social engineering technique, with several twists.
Wealth Management Grandparent Scams The bond between a grandparent and grandchild is unique. Unfortunately, fraudsters may exploit this loving, trusting relationship to trick you and steal your money.
Wealth Management Advance Fees Scams If something sounds too good to be true, it usually is. Keeping that age-old adage in mind is the best way to spot and thwart Advance Fee Scams.
Wealth Management Romance Scams According to the FTC, Romance Scams are one of the top five scams targeting American seniors age 60 and above—and have increased significantly in recent years.
Tech Support Scams
Wealth Management Tech Support Scams
Grandparent Scams
Wealth Management Grandparent Scams
Advance Fees Scams
Wealth Management Advance Fees Scams
Romance Scams
Wealth Management Romance Scams

Sources:

https://www.fcc.gov/more-consumers-adopt-payment-apps-scammers-follow

https://www.consumerfinance.gov/about-us/blog/helpful-tips-using-mobile-payment-services-and-avoiding-risky-mistakes/

Send Money with Zelle® is available on the Morgan Stanley Mobile App for iPhone and Android. Enrollment is required and dollar and frequency limits may apply. Domestic fund transfers must be made from an eligible account at Morgan Stanley Smith Barney LLC (Morgan Stanley) to a US-based account at another financial institution. Morgan Stanley maintains arrangements with JP Morgan Chase Bank, N.A. and UMB Bank, N.A. as NACHA-participating depository financial institutions for the processing of transfers on Zelle. Data connection required, and message and data rates may apply, including those from your communications service provider. Must have an eligible account in the U.S. to use Zelle. Transactions typically occur in minutes when the recipient’s email address or U.S. mobile number is already enrolled with Zelle. See the Send Money with Zelle® terms for details. Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license. Morgan Stanley is not affiliated with Zelle. Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, Member SIPC, and not a bank. Where appropriate, Morgan Stanley Smith Barney LLC has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services. Investment, insurance and annuity products offered through Morgan Stanley Smith Barney LLC are: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED | NOT A BANK DEPOSIT | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

This material is provided for educational and informational purposes only and no representation of any kind is intended with respect to the practices described. Nothing in this article should be construed as a cybersecurity evaluation. Morgan Stanley is not responsible for determining what cybersecurity best practices are most appropriate for your needs.  While efforts have been made to assure the completeness and accuracy of the information as of the date of the presentation, no representation is made that such information is accurate or complete, and Morgan Stanley undertakes no obligation to update the information as its practices change. Reproduction, transmission, dissemination, or other use without authorization or attribution is prohibited.

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