How to spot a PayID Scam

What is PayID?

PayID is an alternative payment transfer system that lets you simply and quickly transfer money between verified bank accounts with a single identifying piece of information. Where previously you needed account numbers, BSB numbers and sometimes account names and may have had to wait days for a transfer to go through, PayID makes it simple and nearly instantaneous to shift money from your account to a merchant’s – or even to accept money from your friends, relatives or anyone else you provide your PayID identifier to.

More than 100 banks and financial institutions now offer PayID, providing consumers with a fast and easy way to transfer money – or accept it – simply by using their phone number, email address or ABN. Rather than fiddle around with account numbers and BSBs, you only need that one piece of information to send or receive funds – it’s really that easy once you’re registered for it through your financial institution.

However, anything easy in the financial world is invariably going to attract criminal attention, and that’s been a big issue for PayID of late.

How are scammers using PayID?

With the direct tie to your bank account, you might think that PayID scams are primarily looking to drain your account of funds, but instead the most prominent PayID scams are instead looking to scam you if you’re selling goods online, by trading on the fact that PayID is a relatively new transfer method that many Australians aren’t entirely familiar with.

The basic PayID purchasing scam runs along these kinds of lines – and while we’ll note that this is a fictional scenario, it’s one that’s been played out a lot for many online sellers, especially for sales through sites such as Facebook Marketplace or similar.

• You decide you want to sell off that ugly vase that your Aunt gave you as a “wedding present”. She’ll never know, and you could really use the cash. You list it on Facebook Marketplace.
• Very quickly you get a response from a very keen buyer. They don’t want to haggle over the price (which sure does feel like a win, right?) and they want to pay with PayID, while claiming a friend or family member will collect it from you in the next day or so.
• You provide the buyer your PayID details, because you figure a fast sale is a good sale.
• They get back to you, stating that they have tried to pay, but there’s a problem with your PayID account; it may need to be upgraded to a business account.
• At around the same time, you get an email from PayID or your financial institution indicating a payment that’s been blocked because of the lack of a business account.
• To show just how willing they are to help you out, the buyer says they’ve paid for the business account on your behalf – but they’d very much like you to cover that cost so that the sale of the ugly vase can go ahead.
• You reimburse the buyer, because you’re happy that they’ve been willing to help.

So… where in that chain is the scam, precisely?

The answer is through the entire chain of events once you’ve listed your goods for sale.

The buyer is fraudulent, there’s no problem with your PayID at all, there’s no such thing as a “business” PayID account and the email that you got that purported to be from your bank or PayID itself is also an absolute fake.

The whole objective here is to get you to pay – sometimes sums listed in the hundreds of dollars – for a fake PayID business account, at which point the “buyer” will suddenly stop communicating with you in any way. They’ve got your money and they can swiftly move on to the next target.

How to spot PayID scams

All of this doesn’t mean you should never try to sell items online – you just have to look out for a few evident red flags that indicate that a buyer isn’t on the level.

• Are they very fast off the mark and keen to buy sight unseen without haggling, and with promises that a “friend” or “family member” will collect the item for them? That kind of pressure to sell is often a sign of a PayID scammer.
• Do they try to switch communications to a third-party application rather than the platform you’ve listed the item on? Taking communications into a private arena lets them mask what they’re doing from snooping eyes.
• Do they insist on payment for PayID services? That’s a clear indication of a scam, because PayID itself doesn’t charge any fees.
• Do you suddenly get messages from “PayID”? That’s a no-no; those services are managed by your bank – and if you get an email indicating an issue with PayID, the smart move is to call your bank – look up the number online, don’t use any number in an email message – and check that way.

What are the risks of giving out my PayID?

One of the better features of PayID is that revealing your PayID only really allows people to send money to you; it won’t enable funds to be siphoned from your bank account.

That having been said, the nature of PayID identifiers – mobile numbers and email addresses particularly – do open up other avenues for contacting you or perhaps bombarding you with scam messages or spam.