Congratulations! You have finally accomplished the task of purchasing that coveted new sofa. However, as the old one is still perfectly functional, you decide to try and earn a bit of cash for it by listing it on popular online trading sites like Facebook Marketplace and Gumtree. Thousands of Australians engage in this fast and convenient option every day, not only to make some money but also to contribute to minimizing waste by diverting goods from ending up in landfills.
Unfortunately, there is a dark side to these online marketplaces. Scammers are relentless in targeting unsuspecting buyers and sellers. Just in 2022, reported losses due to fraudulent buying and selling schemes amounted to over A$45 million. The prevalence and popularity of these platforms have made them a thriving ground for fraudsters, with recent reports even highlighting physical attacks on individuals selling goods.
Nevertheless, scammers usually focus on gaining money through payment methods rather than physically harming people. The PayID scam is a prime example of this, with Australians losing more than $260,000 through this specific approach in 2022.
What exactly is PayID? Introduced in Australia in 2018, PayID is a legitimate electronic payment method aimed at reducing incorrect payments and fraud. It displays the recipient’s name to the person making the transaction, simplifying the transfer of money. PayID eliminates the need to remember bank account and BSB numbers, and resolves issues arising from inputting incorrect information.
To set up a PayID, consumers can use their phone number, email address, or ABN as their identification. The bank then verifies this information and links it to the individual’s bank account, creating a unique identifier.
When using PayID to transfer money, most online banking systems require the user to provide the recipient’s PayID. By entering the phone number, email address, or ABN, the system displays the intended recipient’s name. If the name is correct, the customer can proceed with authorizing the payment. If it appears incorrect, canceling the transaction is easy.
How does the PayID scam operate? Typically, when you advertise an item online, a scammer interested in purchasing it will contact you. They will often not question the price or request to view the item in person. Instead, they might claim that a family member or friend will come and collect it from you.
The scammer will then push you to accept payment through PayID. Once you share your PayID (which is usually your phone number or email address), the scammer might take advantage in different ways. For instance, they may assert that they have made the payment but it cannot be processed due to your supposed lack of a suitable PayID account. They will then demand that you “upgrade” the account or make an additional payment to release the funds.
Furthermore, they may insist that they have paid the required extra amount and ask you to reimburse the funds they spent. Should you transfer any money, it will go directly to the scammer, resulting in your loss.
To enhance their scam, offenders may create fake text messages and emails that appear to be from PayID, providing confirmation of payments or highlighting problems with the transaction. These messages can even appear within existing SMS threads with your bank, deceiving you into thinking they are genuine.
How can you avoid falling victim to a PayID scam? There are several warning signs to watch for when selling goods online:
1. PayID is a free service, so no costs or fees should be associated with its usage.
2. PayID is administered through individual banks. PayID will never directly communicate with customers through texts, emails, or phone calls. Any correspondence supposedly from PayID should be regarded as fake.
3. A genuine buyer would typically want to inspect and collect the goods themselves. If a buyer insists on sending a family member or friend, especially if they are unwilling to pay in cash, it is a red flag.
What should you do if you have fallen victim to a PayID scam? If you suspect you have been scammed, contact your bank or financial institution immediately. The sooner you take action, the better. You should also report any financial losses to ReportCyber, an online police reporting portal for cyber incidents. Additionally, report the incident to Scamwatch to aid in educating and raising awareness about such scams. Lastly, if your personal information has been compromised, seek support from IDCARE.
In 2023 thus far, Australians have reported losses exceeding $32 million due to buying and selling scams, including the PayID scam. It is crucial to remain vigilant when engaging in online transactions and consult the Scamwatch website for information on other types of scams.
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