Safety in a P2P World

It’s hard to dispute the convenience of apps like Zelle, Venmo, and PayPal. You know what else can be hard to dispute? A fraudulent transaction using  Zelle, Venmo, or PayPal.

As it stands, consumers who unknowingly transfer funds to a fraudster by using this methodology have little recourse to recover their money. That is likely to change in the future as the Consumer Financial Protection Bureau (CFPB) has been urged to expand on existing regulations (Regulation E and the Electronic Funds Transfer Act) to include liability for these types of transactions.

We all know that change doesn’t happen overnight. So what can you do to protect your money until regulations have been implemented?

·         Know who is receiving the money. Always confirm the identity of the person you are paying. Ask them to verify their email, phone number, user name, and any other details that can help you make sure that your money is going to the correct person.

·         Think before you click. Impulse buying can be dangerous to your wallet and your financial security. Take a beat to consider whether you really need the item or service. Can you use another (safer) payment method? Are there other options?

·         Never use a P2P service to make a charitable donation. Legitimate charities offer multiple ways to give.

·         Use P2P’s sparingly – or not at all. Sometimes, the risk outweighs the convenience factor.

I want to hear from you! Leave a comment below or email me.

Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that help consumers reach and maintain financial security and start living the life they’ve always wanted.