What Is Push Payment Fraud? How to Recognize and Report It

Defining Push Payment Fraud

Push payment fraud occurs when an individual is tricked into authorizing a payment directly from their own account to a fraudster’s account. This scheme relies on deception, where the victim believes they are making a legitimate transaction to a trusted entity, but funds are actually transferred to a criminal. The defining characteristic is that the victim initiates the payment themselves, distinguishing it from situations where funds are taken without their direct involvement.

A “push payment” means the account holder actively sends money using methods like bank transfers, wire transfers, or peer-to-peer (P2P) payment applications such as Zelle, Venmo, or PayPal. This contrasts with “pull” fraud, which involves unauthorized transactions like a credit card charge without consent or identity theft. Fraudsters use social engineering and impersonation to manipulate victims into believing payment requests are legitimate.

Recovering funds in push payment fraud is challenging because the victim authorizes the transfer. Financial institutions often classify these as legitimate transactions, making reversal difficult once money leaves the account. Funds transferred via wire or P2P apps move quickly, complicating recovery efforts. Understanding this distinction helps in recognizing and protecting against these schemes.

Common Scenarios of Push Payment Fraud

Push payment fraud manipulates victims into initiating transfers under false pretenses. Business Email Compromise (BEC), also known as invoice fraud, is a common example. Criminals impersonate a vendor, client, or colleague, sending fraudulent invoices or payment requests with altered bank details. This tricks businesses into rerouting legitimate payments to the fraudster’s account, causing significant financial losses.

Romance scams involve fraudsters building a fake relationship with a victim, often online, to gain their trust and emotional attachment. Once a bond is established, the scammer fabricates emergencies or dire financial situations, asking for money for medical bills, travel expenses, or business investments. The victim, believing they are helping a loved one, “pushes” payments, often through wire transfers or gift cards, which are then lost.

Tech support scams exploit fear of computer problems. Scammers pose as technical support from well-known companies, claiming a victim’s computer has issues and convincing them to pay for unnecessary services via wire transfers or gift cards. Government impersonation scams leverage fear by pretending to be from agencies like the Internal Revenue Service (IRS) or Social Security Administration. They threaten legal action or promise benefits, coercing victims into payments, often through unusual methods like gift cards or cryptocurrency.

Online purchase scams involve fraudsters advertising non-existent goods or services, typically on social media or fake e-commerce sites. Once the victim pays for the advertised item, often through a P2P app or direct bank transfer, the seller disappears without delivering the product.

Recognizing Indicators of Push Payment Fraud

Identifying warning signs of push payment fraud is important for prevention. A common indicator is an urgent or high-pressure demand for action. Fraudsters create panic or rush to prevent victims from thinking clearly or verifying the request. They might claim an account will be closed, legal action taken, or a limited-time offer will expire unless immediate payment is made.

Another red flag is a request for payment using unusual methods. If someone asks for payment via gift cards, cryptocurrency, or wire transfers for common services, taxes, or purchases, it should raise immediate suspicion. Legitimate businesses and government agencies rarely request payments through these unconventional and untraceable means.

Fraudsters often seek personal or financial information unnecessary for the purported transaction. For instance, a “tech support” caller might ask for bank account details beyond payment processing, or an “employer” might request sensitive personal information before an interview. Inconsistencies in communications, such as slight variations in email addresses, phone numbers, or company names, along with grammatical errors or awkward phrasing, also serve as warnings. Unsolicited communications from unknown senders claiming to be from a known entity, like a bank or government agency, warrant caution.

Offers that seem too good to be true, such as promises of large sums of money or incredible deals for a small upfront payment, are often part of a scam. These enticing offers exploit greed, convincing individuals to “push” funds for a larger return. Emotional manipulation, playing on fear, greed, or sympathy, is a hallmark of many push payment schemes. Fraudsters craft narratives that tug at emotions to bypass logical reasoning, so always pause and verify unexpected or emotionally charged requests for money.

Actions After Experiencing Push Payment Fraud

If you fall victim to push payment fraud, immediate action is important for recovering funds and preventing further harm. The first step is to contact your financial institution or payment app provider. Report the fraud immediately, providing all available details: amount, date, recipient’s information if known, and how you were deceived. The sooner you report, the higher the chance your bank might intercept or recall the funds.

Report the fraud to relevant law enforcement and consumer protection agencies. In the United States, file a report with the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) at ic3.gov. Also, report the incident to the Federal Trade Commission (FTC) at reportfraud.ftc.gov, as they track fraud trends and provide resources for victims.

While taking these steps, gather and preserve all evidence related to the fraud. This includes saving emails, text messages, chat logs, screenshots, and financial records. These details are important for your financial institution and law enforcement to investigate the crime. Maintaining a detailed record of events and communications aids recovery.

If any personal information was compromised, secure your accounts. Change passwords for all online accounts, especially banking and email. Consider placing a fraud alert or credit freeze with the major credit bureaus (Equifax, Experian, and TransUnion) to prevent new accounts from being opened in your name.