PayPal 1-Cent Transaction Scam: What to Do

It’s always nice to get money, but not when that cash is bait being used to take all of yours. Today, we’re looking at a well-known scam, the PayPal 1-cent transaction, where fraudsters deposit a trivial amount into your account and follow it up with an urgent message that prompts you to contact them so they can obtain information to steal your money or details.

One Scam, Several Names

Though we’re looking at the PayPal version of the 1 cent scam, this form of fraud isn’t anything new. Variations are sometimes called the “penny scam,” “small deposit scam,” or “micro-deposit scam.” It’s used to impersonate many companies and financial institutions.

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The amount deposited may vary, but the result is always the theft of money or personal information.

Anatomy of the PayPal 1 Cent Transaction Scam

It starts, as many scams do, with unsolicited contact. Your PayPal account notifies you that a trivial amount like $0.01 has been deposited into your account.

As confusing as that is, there comes a follow-up message or email that appears to be from PayPal itself, stating that an even larger amount (from an official-sounding or well-known company) is pending (an amount usually ending in “.99” to represent the penny’s deduction) and that urgent action is needed.

A portal or hyperlink is provided, which the victim, still in confusion and panic, quickly clicks. This takes them to a “help line” or a “login” screen. What happens then may differ. The victim could be tricked by the scammer into installing security software on their PC, which is actually remote access software or malware that can be used to access personal data and bank accounts.

They may also try to “refund” money and send too much, requiring the victim to send back what was never actually paid.

Another form it could take is taking the user to a phishing page (spoofing PayPal, of course) and asking them to put in sensitive information like usernames, passwords, and PINs to halt the imaginary transaction.

A third possible form is for the scammer to ask for money directly, to reverse the charge, in the form of a fee or fine.

Why the Deposit?

If scammers are trying to get money from you, why send you money? Apart from the hefty profit should they succeed, it’s important to know that scammers can’t deduct money from your account until they have access to your details.

The initial deposit is the only option available to them, and the curiosity, or panic, an unknown deposit into your PayPal account can cause is often enough to prompt action on its own, and the fake message with a massive amount mentioned sets the trap.

Guarding Against This Scam

While this scam may take on different forms and even extend beyond PayPal in the future, it’s important to keep safe following the pointers below:

Beware unsolicited contact – Money and messages out of the blue, especially regarding financial platforms, should never be taken at face value. Urgent language and time limits are classic tactics for spurring an emotional – not rational –
Confirm with PayPal – Always double-check everything through your PayPal app or through the site directly. Do not use any hyperlink provided in the email. Don’t be afraid to contact them directly to double-check a suspicious transaction.
Do not reply – Scammers rely on snap reactions. Ignore the temptation to follow up and ignore the message completely. If it is from PayPal, they will try contacting you through their app or site.
Change your security – If you’ve allowed someone access to your account or even if you just feel compromised, it’s a good idea to change your password and enable two-factor authentication if you haven’t already.

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