How Are P2P Scams Carried Out? 5 Ways to Avoid P2P Scams
Reading Time: 4 minutesCryptocurrencies are unregulated and come with little protection. The risk for scams is even higher when you’re exchanging money peer-to-peer.
Cryptocurrencies are built on blockchains, making them secure and hard to hack. Their high level of security makes it safe to carry out transactions, including P2P transactions.
But scammers always look for ways to defraud people of their funds by bypassing the normal transaction process, and P2P transactions have caught their eye. Bad actors use different methods that you need to be aware of, so you can be careful whenever you want to carry out a P2P transaction.
Scams in P2P Trades
P2P trades involve two individuals trading cryptocurrency with each other without the need for a middleman or any third party. When carrying out a P2P trade, you are fully in charge: you decide when and who to buy and sell from, your payment option, and many other parameters as you wish.
The regulations around P2P transactions are a little relaxed since there is no direct third-party involvement in the trades. For this reason, bad actors try to defraud people who are not careful enough when transacting.
How P2P Scams Work
The following are some ways in which P2P scams are executed.
Fake Bank
A buyer sends a fake credit alert to the seller, so the seller can confirm payment and complete the transaction. Since the seller has gotten a credit alert, he may not bother to check his account to confirm that the money has truly been sent. This way, the seller releases the funds in exchange for nothing.
Double Identity
A seller can use alternative means to tell buyers where to send their funds. After the buyer sends the money, the seller will start to claim that the transaction has not been completed since he has not received the money. In this case, the seller won’t release the already-locked funds in order to get paid twice.
For this to happen, the seller often communicates with the buyers privately, usually outside the P2P trading platform. So, even if the buyer reports such a case, there may be no valid evidence of such a transaction since there is no record on the platform and the money was sent to an account that does not bear the seller’s details.
Fake Customer Support
Scammers can offer to help you solve an issue with your P2P platform under the guise of an official customer representative. They can send you links that will redirect you to a website similar to the original one. Logging in with your details on such a website will give them access to your details, with which they can withdraw all your funds or carry out other fraudulent activities.
Fake Receipts or Forgery
Scammers forge screenshots and other evidence to claim they have paid and carried out their part of the transaction. They do this to pressure the seller into releasing funds even though the transaction has not been confirmed in the seller’s account. A seller who falls for this only releases the fund in exchange and gets nothing in return.
5 Ways to Avoid P2P Scams
The following are ways you can avoid falling prey to these fraudulent activities.
1. Make Sure You Record Transactions
Always find a way to record your transactions as proof that you have completed them. You can take screenshots frequently to have evidence against a fraudulent client or the P2P platform you are using.
2. Always Confirm Transactions in Your Account
This is a good way to avoid fake transfers. Always check your bank account or wallet to confirm that your transactions have been successful. It is not a good idea to rely on the buyer’s proof. Make sure you confirm it yourself from your account before you authorize crypto transfers.
3. Trade on Secure Platforms
It may be better to trade on reputable exchanges, as these exchanges have robust security measures to protect their users. Some exchanges carry out identity verification processes to protect you from trading with fake accounts and identities.
Some exchanges offer escrow service that allows them to lock funds that are to be transacted until the parties involved have confirmed that the transactions have been completed. Making sure you trade in exchanges with such a service gives you enhanced protection.
Don’t forget to search for honest reviews online and offline (if possible) about the P2P platform you want to use before you buy to know what people who have used the platform have to say about their experiences. Don’t forget that using an exchange with high-security levels is no use if you are not cautious.
4. Only Interact on Official Channels
Don’t reply to any message from any platform or channel that claims to be attending to your request or complaint if it is not from the P2P exchange’s official line. Avoid sending your detail to unofficial representatives to assist you with any issue.
To ensure this, make sure you use an exchange that has active support so that you can always get replies to your complaints and queries without delay. You can test the support channels before you need them to see their response speed and determine the method you find most convenient.
When trading, it is always better to stick to communicating with the other party, either the buyer or seller, on the trading platform to curb the activities of scammers. Maintaining platform communication also makes it hard for someone to raise false disputes against you.
5. Avoid Traders With a Low Transaction Completion Rate
P2P platforms typically let you see the number of successful trades or the success rate a trader has had in relation to the number of trades the trader has attempted. The number can tell you a lot about a trader, and with that, you can decide whether to trade with him or not. Make sure you stick to traders that have high trade completion rates and have also completed many trades. A review can also let you know what others have experienced. Take the time to read what former customers have written about the trader.
Always Stay Vigilant
It is easier to lose money than to gain it, making it important to be vigilant so that you don’t get robbed of your hard-earned money. Make sure you are cautious about every move you make in trying to carry out a P2P transaction, as any mistake may be irreversible.
Reference: https://www.makeuseof.com/how-are-p2p-scams-carried-out-5-ways-to-avoid-p2p-scams/
Ref: makeuseof
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