Here's a scenario for you...

Say you're selling something—online or offline—and you get paid by a stranger. He pays you via payment app—think Venmo, Zelle, Square Cash and the like—and the money shows up in your app account instantly. You hand over your product and you both go your separate ways. The deal is done!

Even though the money may show up in your app account instantly, the transfer may take a few days to actually get through the banking system.

Even though the money may show up in your app account instantly, the transfer may take a few days to actually get through the banking system. At this point, in some apps, crooks could dispute the payment, or use a stolen credit card. Either way, the payment will be reversed after some time.

If you spent or transferred out any of the money you received in your deal, you'll have to pay it back to your financial institution. You'll be out the cash and most likely the product you sold, too.

A tip? Use cash to sell items to strangers. When buying something from a stranger, use a cash app from your financial institution, rather than a third-party payment app. The difference is that with a cash app, you link a debit card and items can be disputed. Payment apps, like Venmo, general say that when the money is gone, it's gone...

More Scams

There are other ways to get scammed on your payment or cash app also, here are some giveaways that should raise a BIG RED FLAG when you see them:

• You get a message saying you won the lottery and need to pay a (small) fee to claim your prize.

• A friend or loved one is in trouble and needs money. They probably contact you from a new/different number or email address.

• You're in debt with a company, or owe money to the IRS.

The General Giveaway?

The scammer has a "believable" story and wants money to be send to him quick, either via app, via bank or wire transfer, or even via check or money order.

• Never, ever, send money to a stranger unless you're absolutely sure you're in a trusted deal.

• After a deal with a stranger, wait a few days until you touch that money. It may be reversed...

• As said, using a credit card may allow you to dispute the charge.

If You Got Scammed

Report it to the authorities, like the cops and the FTC, alert your financial institution(s), and if scammed online, change your passwords on all your accounts asap.

Are you curious about scams that are happening in your area? Use the Better Business Bureau's Scam Tracker to find out.

More about payment and cash apps in FoolProof Solo Module 4, so head there now! Register for an account, and you'll be a pro in no time.

Cheers, Will

PS. While you're there, brush up on your other money skills, too!