Accidental Payment Scams on Cash App and PayPal
Americans lost $12.5 billion to fraud in 2024, according to the FTC.
Quick Answer
In the accidental payment scam, fraudsters send you money seemingly by mistake and then ask for it back, but the initial transfer is fraudulent, causing you to lose any money you return; in 2023, consumers filed about 65,000 fraud reports involving payment apps, with PayPal and Cash App being the most frequently named.
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How It Works
1
A scammer sends you money on a peer-to-peer (P2P) payment app like Cash App or PayPal. This transfer is made using a stolen credit card or a hacked bank account.
2
The scammer immediately contacts you, claiming the payment was an accident. They create a sense of urgency and ask you to send the money back right away.
3
You, trying to be honest, send the money back to the scammer from your own account. Shortly after, the original fraudulent transfer is discovered by the bank or payment app and reversed from your account.
4
The scammer disappears with the money you sent them, and you are left with a negative balance because the initial, fraudulent funds were clawed back from your account.
Red Flags
- You receive an unexpected payment from a stranger.
- The sender immediately messages you with an urgent or panicked story about sending the money by mistake.
- You are pressured to act quickly to return the funds.
- The person asks you to send the money to a different account than the one it came from.
- The sender's profile seems suspicious, new, or has very little information.
- They insist you communicate outside the payment app's official channels.
What to Do If Targeted
- Do not touch or spend the money you received.
- Do not send the money back to the person who sent it.
- Take screenshots of the transaction, the sender's profile, and any messages they sent.
- Report the transaction as a mistake or unauthorized payment directly within the app's support or resolution center.
- Contact the payment app's official customer service to explain the situation and ask them to reverse the transaction.
- Block the user who sent you the money to prevent further contact.
How to Report It
- FTC — File a fraud report with the Federal Trade Commission to help them investigate and stop scammers.
- FBI IC3 — Report the internet crime to the FBI's Internet Crime Complaint Center (IC3).
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- In 2023, consumers submitted about 65,000 fraud reports where a payment app or service was used, with PayPal named in 28% of reports and Cash App in 24%. — FTC 2024
- The median individual loss reported for scams involving payment apps or services in 2023 was $380. — FTC 2024
- Total reported losses to fraud reached over $10 billion in 2023, a 14% increase from the previous year. — FTC 2024
- The FBI's Internet Crime Complaint Center (IC3) received 800,944 complaints in 2022 with potential losses exceeding $10.2 billion. — FBI IC3 2022 Report
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Frequently Asked Questions
If you sent money back to a scammer, you should immediately report the fraud to the payment app's support team and your bank. The original transaction the scammer sent will eventually be reversed, and the money you sent is likely gone, as P2P transactions are often irreversible. File a report with the FTC at reportfraud.ftc.gov and the FBI at ic3.gov.
Recovering money from a payment app scam is very difficult because these transactions are often instant and irreversible, similar to handing someone cash. These apps do not offer the same consumer protections as credit cards. While you should always report the scam to the platform, there is no guarantee you will get your money back.
Scammers use stolen credit cards or hacked bank accounts to fund the initial "accidental" payment. This allows them to send money that isn't theirs. When the legitimate cardholder reports the fraud, the bank reverses the charge, which is why the money is ultimately removed from your account after you've already sent your own funds to the scammer.
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