Common Digital Wallet Scams and How to Avoid Them

Digital wallets and payment apps make it easy to send money, split expenses, and make purchases with just a few taps. Whether you use Venmo, PayPal, Cash App, Zelle, Apple Cash, or another payment app, it's important to stay alert. Scammers often target these platforms because transactions are fast, trusted, and can be difficult to reverse.

Like many scams, one of the biggest warning signs is urgency. Whether it's an urgent travel update, suspicious account alert, or unexpected payment request, scammers often show up in ordinary situations and rely on catching you off guard before you have time to think twice.

 

 

Fraud can happen to anyone. It shouldn’t feel embarrassing—scammers are very good at what they do. They often create believable scenarios that play on everyday experiences and emotions. Because these scams can look like routine digital payment transactions, they can be difficult to recognize in the moment.

 

 

The Situation: You post a watch for sale online for $200 and quickly find a buyer. Shortly after sending payment, they message you apologetically, explaining they accidentally sent $500 instead of $200. Embarrassed by the mistake, they ask if you can send back the extra $300.

 

Wanting to be helpful, you send the money back. A few days later, the original payment is reversed because it was made using a stolen card or compromised account. The $500 disappears from your account—but the $300 you sent back came from your own money, and now it's gone.

 

Why This Feels Suspicious: The buyer is asking you to act quickly and counting on your willingness to help. An overpayment, especially one significantly larger than the agreed-upon amount, is a warning sign that something isn't right.

 

What You Should Do: Don't send money back yourself. Instead, contact the wallet provider and let the platform handle the disputed transaction through its official process.

The Situation: You're eating dinner when you receive a text claiming there's suspicious activity on your digital wallet account and asking you to verify your identity. Concerned, you click the link. Soon after, someone claiming to be from the fraud department calls and asks for the verification code that was just sent to your phone. They know your name and other personal details, making the call seem convincing.

 

Wanting to protect your account, you provide the code—unknowingly giving the scammer access to your account. 

Why This Feels Suspicious: Legitimate companies won't ask you to click unexpected links or share PINs, passwords, or verification codes. Scammers use these requests to bypass security measures like Multifactor Authentication (MFA) and gain access to your account.

 

What You Should Do: Never trust inbound texts, calls, or give out your personal information or verification codes. Instead, open the official app yourself and contact support from verified contact numbers.

 

 

The Situation: You list a piece of furniture on Facebook Marketplace and quickly receive a message from an interested buyer. They agree to your asking price and say they're willing to pay for shipping. Shortly after, you receive an invoice for an upfront shipping insurance fee, which they'll reimburse.

 

Since the sale seems genuine and the buyer appears eager to move forward, you pay the fee.  A few hours later, the buyer cancels the order, stops responding, and disappears. The item never ships, and the money you sent for the "insurance" is gone.

Why This Feels Suspicious: The buyer is asking you to spend money before you've received payment for the item. They may make the request seem routine or urgent and even send an invoice, but upfront fees to complete a sale are not common.

 

What You Should Do: Never pay money to receive money. Keep communication and payments within the marketplace platform whenever possible, and be cautious of requests to pay shipping, insurance, or other fees before a transaction is complete.

 

 

The Situation: You meet someone online through social media or a dating app and quickly form a connection. Over weeks or even months, they earn your trust by sharing details about their life and staying in regular contact. Eventually, they ask for help with an emergency or encourage you to invest in what appears to be a successful cryptocurrency opportunity. 

 

Believing you're helping someone you care about or making a smart investment, you send money through a payment app or crypto wallet. Soon after, the person disappears, taking your money with them.

 

Why This Feels Suspicious: The request for money comes after trust has been established, making it feel more personal and trustworthy. Scammers often rely on emotional connections to lower your guard, especially when the request involves an emergency, investment opportunity, or promise of future returns.

 

What You Should Do: Be cautious of anyone you've only met online who asks for money or investment funds. Before sending money, talk to someone you know and trust, and independently verify any investment opportunity. A second opinion can help you spot warning signs that may be difficult to see in the moment.

 

 

While scammers continue to find new ways to target digital wallet users, a few simple habits can go a long way in keeping your digital wallet secure. Use strong, unique passwords, enable multifactor authentication, and consider using a password manager. Password managers can securely generate and store passwords and only require you to remember one master password.

 

 

If you believe you've been scammed, contact your wallet provider and bank or card issuer immediately. The sooner you act, the better your chances of limiting further fraud. Then report the fraud to the Federal Trade Commission (FTC). If the scam involves online fraud, cryptocurrency, or a significant financial loss, you can also file a report with the FBI's Internet Crime Complaint Center (IC3) to help law enforcement track and investigate internet crime.