What is an authorised push payment scam?

13 Apr 2024

An authorized push payment (APP) scam is also called a bank transfer scam. Push payment fraud is a fraud where the fraudster tricks a victim into making an authorized push for transferring money into a criminal's account.

APP fraud functions by deceiving the victim into willingly parting with his money by initiating and authorizing a payment, frequently via the use of threats, deception, or coercion. In contrast, prior thefts involved the direct pilfering of money. Because these scams are known to occur under authorized push payments, people and businesses should be aware of them.

How authorized push payment scams work

The stages that are most likely involved in an authorized push payment scam are typical and typically follow a similar pattern of dishonesty and manipulation, which goes like this.

• First contact: Fraudsters start their contact with people in different communication channels, such as calling, emailing, texting, or even contacting them through social media. They even pretend to be authentic bodies, such as banks, the government, or even a service provider whom the victim knows.
• Deception and manipulation: Using persuasive tactics, Jason drives victims by fabricating some other urgent or compelling scenarios, such as their bank account has been compromised, winning a prize, or owing taxes or fees.

They may exploit emotions like fear, curiosity, or greed to manipulate victims into complying with their demands.

• Order for fund transfers: As soon as the con artist feels comfortable enough with the victim, he can organize any payment or money transfer utilizing mobile payment applications, bank wire transfers, or even other techniques.

The victims may even be required to give out sensitive financial information or details that facilitate access to their online banking accounts to be used in facilitating the transaction.

• Authorization and payment: In some cases, the authorization of the payment may be volunteered by the victims, thinking that the resolution of a genuine problem or the participation in a genuine transaction lies on the other end of the fund transfer.

The victim may be unaware that the promised goods or services will never arrive and that the money will instead go directly into the scammer's account.

• Realization of fraud: The question of whether or not what happened was real is answered much later, at which point it is too late to ask.

It is frequently difficult to find the culprits or retrieve the missing money by this time.

Preventive measures against authorized push payment scams

1. Verify identities: Always verify the identities of every person or organization that contacts you, especially when asking for sensitive details or financial transactions. Reputable organizations won't force you to make snap decisions or divulge confidential information unless your identification has been properly verified.

2. Be watchful: Never, under any circumstances, trust any communication from an unknown source, especially if it requires prompt action or dangles unrealistic rewards or benefits before you. Additionally, try to find out where the communication originated or even if the person making the allegation is real.

3. Secure communication channels: Always use reliable and secure communication channels such as an official website, phone number, or email address of the organization, only to confirm the authenticity of the request or inquiry. Do not follow links or download attachments from unidentifiable or suspicious sources.

4. Personal information protection: Protect your personal and financial information from cons by sharing your sensitive details, like account numbers, passwords, or PINs, with nobody other than those whom you trust in your life. Even be cautious about sharing them over the Internet or while talking over the phone, as scams could happen.

5. Stay informed: Knowing the insider tips for common scams and the fraud trend can help you see warning signs early on and avoid being duped into paying for services you are not authorized to receive.

6. Report: Any of such activities should be reported to the authorities or consumer protection agencies, as this may help others from being victimized.

Authorized push payment scams are a prevalent type of financial fraud when the perpetrator exploits the victim's confidence to trick them into authorizing a payment that they are unaware is for a fraudulent transaction.

This article explains the workings of these types of scams and the preventative measures that people and organizations should take to confirm the authenticity of such requests or to safeguard sensitive data to avoid falling victim to this fraudulent scheme.

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