Think Before You Refund: Protect Yourself from Payment Reversal Scams

Selling furniture, electronics, concert tickets, or other items through online marketplaces has become a convenient way to earn extra money. Unfortunately, scammers are using peer-to-peer payment apps like Venmo, Cash App, and similar services to trick sellers into sending away their own money.

Here's how the scam works.

How the Scam Works

You list an item for sale online and quickly receive a message from an interested buyer. They send payment through a peer-to-peer payment app, but shortly afterward they contact you with an urgent request.

They may claim:

• "I accidentally sent you too much."
• "I paid the wrong person."
• "Can you send the money back?"
• "Please refund the extra amount right away."

The payment may appear in your account, making the request seem legitimate. Wanting to do the right thing, you send the money back.

Days later, you discover the original payment has been reversed because it was funded by a stolen credit card, a compromised bank account, or another fraudulent payment source. The payment disappears from your account, but the money you voluntarily sent to the scammer is gone for good. If you've already shipped or handed over the item, you've lost that too.

Protect Yourself

Before refunding money to someone you don't know, keep these tips in mind:

• Don't send money back through a separate transaction. If someone says they made a mistake, ask them to work directly with the payment app to resolve the issue.
• Be cautious of urgency. Scammers often pressure victims to act immediately before they have time to think.
• Verify before completing the sale. If something about the payment or the buyer seems unusual, pause and investigate before shipping or handing over the item.
• Consider safer payment methods. For local sales, cash or verified payment methods completed in person may reduce your risk.
• Trust your instincts. If a buyer's story doesn't make sense or they seem unusually insistent, it's okay to walk away from the sale.

Remember

Once you authorize a payment through a peer-to-peer payment app, recovering those funds can be difficult. The best defense is recognizing the warning signs before sending money.

If you ever have questions about a suspicious payment or believe you've been targeted by a scam, contact NGFCU as soon as possible. While we may not be able to recover funds sent through a peer-to-peer payment app, we can help you secure your accounts and provide guidance on the next steps to protect your finances.