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Be cautious with money-transfer apps - there’s no ‘undo’ button

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Almost 44 million people in the United States used money-transfer apps on their smartphones in 2021, and a number of them were ripped off. Sometimes funds were redirected to an imposter, other times fake customer-support people lured people into providing their account login information or to unscrupulous actors engaged in make-money-fast offers.

Every time you open a money-transfer app such as Zelle or Cash App, remember that you are dealing in currency. If you lose money to a fraud or a mistake, it’s extremely unlikely you will get it back. Unlike the debit and credit cards at Tropical Financial Credit Union, there are no limits on your losses and no way to challenge or undo the transaction. Your hard-earned money is simply gone.

During Cybersecurity Awareness Month, we are offering tips to help you avoid falling victim to scams and accidents:

Send money only to people you know well. They are your close relatives, friends, co-workers and others whom you interact with on a regular basis. You have called, texted or emailed them, so you know that their phone numbers and email addresses are legitimate. Someone you have just met, or a business that you are paying for the first time could easily being engaging in identity fraud.

Don’t pay your bills with your app. Scammers set up fake websites and online accounts that closely resemble those of utilities, landlords and similar companies. They steal your money and login information. The safer way to pay recurring bills is to set up online accounts directly connected to your bank account such as the bill-pay service here at TFCU.

Be suspicious of threatening calls and texts. Have you heard of vishing or smishing? They operate on the same principle. You receive a phone call or text from someone who knows private information about you such as your bank account number. You’re informed of a “serious problem” with a creditor, even the IRS, that you must resolve with a quick money transfer.

Watch for fake offers. Cash App holds a cash sweepstakes every Friday. Phony contests using the company name and hashtag appear on social media at the same time to lure you into sending a few bucks or sharing your login information. Similarly, with Black Friday, Black Monday and other holiday sales coming up this holiday season, avoid sales promotions that are too good to be true.

Don’t be crypto-scammed. Cryptocurrency is being touted as a great way to invest and move money outside the traditional financial system. Companies with exotic, hard-to-trace names pay real earnings on your first investment to entice you to put in more money. The reality: Once you deposit enough funds, the company disappears.

Take it slow with payments. Even when you feel sure that your app transfer will go through as planned, test the system. Send $1 one to the person or company and confirm that it was received. If the answer is yes, transmit the rest of the funds.

Don’t let romance be your financial downfall. Some scammers call or email people saying they are a close relative or colleague with an urgent need for money. The social media twist is that they meet you on social media such as a dating app and earn your trust by building a digital relationship. Then, one day they message that they alert you that they have an emergency and ask for your help. You send the money; they ghost you.

How can you avoid becoming a victim? Here are a few more steps:

  • Never give anyone your login information  -- to any account.
  • Don’t store money on your phone. Move it from your bank account when needed.
  • Make only small-dollar transfers. For big purchases, use a credit or debit card.
  • Don’t click on links in texts that demand money or would take you to a login webpage.
  • Read about more ways to protect yourself with this article on account safety and another on fraud prevention on our TFCU website.