The PayID 'Upgrade' Scam: How It Works and How to Beat It

The PayID "upgrade" scam targets people selling items online. A fake buyer says they paid you by PayID, but the money is "stuck" because your account is not a "business" PayID. They send a fake email from "PayID" saying they paid extra to upgrade you, and ask you to refund the difference. None of it is real. Your bank manages your PayID, PayID never emails you, it has no business upgrade, and you never pay money to receive money. If you sell on FlyerBoard or anywhere else, this is the one scam every seller should know by heart.

This post goes deep on one scam. For the full list of secondhand scams and the general safety checklist, read how to spot and avoid secondhand scams in Australia.

How does the PayID upgrade scam work?

The scam follows the same script almost every time. Banks and consumer groups describe the same steps (NAB, CHOICE):

1. A fast, easy buyer. Minutes after you post, someone wants to buy. They do not haggle. They do not ask questions. They often cannot come in person and will "send someone" to collect.
2. PayID only. They insist on paying by PayID before pickup, and ask for your PayID and email address.
3. The "problem". You get an email that looks like it is from PayID or your bank. It says the payment cannot be released because you have a personal account, not a "business" PayID.
4. The fake overpayment. The "buyer" says they paid the upgrade fee for you, often hundreds of dollars on top of the price. A second email "confirms" the extra payment.
5. The ask. They pressure you to send the fee back right away, so the sale can "complete". If you pay, that money is real and it is gone. No payment ever arrives in your account.

Some versions skip the upgrade story and just send a fake receipt showing they "accidentally" overpaid. The ask is the same: refund the difference.

The three facts that expose it

You do not need to study every fake email. Three facts from PayID itself end the scam:

The source is PayID's own website, run by Australian Payments Plus. It states: "PayID will never contact you directly. Not ever." and "PayID will never ask you to send money to receive money or ask you to 'upgrade your account'" (PayID). Its FAQ adds that any message asking you to upgrade to a business account is a scam (PayID FAQs).

Banks say the same. NAB says PayID never asks you to send money first and never needs extra steps like upgrades or fees. It also never sends you an email, text or message directly (NAB). Westpac puts it simply: you should never be asked to pay a fee to access PayID or to upgrade your account to use it (Westpac).

What does the fake email look like?

The emails are good. They copy the PayID logo, use a serious tone and sometimes a fake reference number. Common lines:

• "Your PayID account is not a business account and cannot receive this payment."
• "The buyer has paid an additional $xxx to upgrade your account to a business PayID."
• "Please reimburse the buyer within 24 hours so the funds can be released."
• "Failure to complete this step may result in your account being suspended."

The tell is not the design. It is the fact that the email exists at all. Real money shows up in your bank app, with no email from "PayID" needed.

How much are Australians losing?

CHOICE reports over $260,000 in losses to PayID scams in 2022, and NAB attributes a $260,000 figure for PayID impersonation scams to Scamwatch. That is the most recent PayID-specific figure we could find. CHOICE says scammers often ask for hundreds of dollars back. That is small enough to feel like something you can "sort out" rather than question, which is why the scam works.

Scamwatch's buying and selling scams page covers the wider pattern and is where to report a scam.

What should I do if a buyer sends me one of these?

Stop. Do not reply to the email. Do not send any money. Then:

1. Check your bank app. Not the email, not a screenshot. If the money is not in your account, you have not been paid.
2. Stop talking to the buyer. Do not argue or explain. They are working a script.
3. Report the buyer. On FlyerBoard, use the flag icon at the top of the chat. On any site, report the profile so others are protected.
4. Report it to Scamwatch. Go to scamwatch.gov.au and use the report form. It takes a few minutes and helps the ACCC track the scam.
5. If you already sent money, call your bank now. Ask them to try to recall the transfer. Speed matters.

How do I avoid it next time?

The simplest rule covers it: only take payment in person, at the moment you hand over the item. For local secondhand sales that is easy. The buyer transfers while you both watch the money land, or pays cash.

Beyond that:

• Be wary of buyers who will not meet. Local pickup is the whole point of a community marketplace, and it kills this scam.
• Never pay to get paid. No fee, no upgrade, no refund of an "overpayment".
• Keep the conversation in the app. A buyer who pushes to move to email or text is often setting up the fake-email step.
• Be careful sharing your email address with a buyer you have not met. Scammers use it to send the fake "PayID" email.
• Trust your bank app, nothing else. Screenshots, emails and texts prove nothing.

Frequently asked questions

Q: Does the upgrade scam mean PayID itself is unsafe? No. PayID is a normal bank feature, and it shows the payer your name before they send, which helps prevent mistakes. The scam does not break PayID. It tricks you into sending money yourself.

Q: Is there a "business PayID" I need to receive larger payments? No. Businesses can register a PayID using their ABN, but there is no upgrade a seller needs to receive a payment. Any message saying otherwise is a scam.

Q: Does PayID ever send emails or texts? No. PayID says it will never contact you directly. Any email or SMS that claims to be from PayID is a scam. Contact comes from your bank, through your bank's normal channels.

Q: A buyer says they paid extra to upgrade my PayID. What now? Check your bank app. If the money is not there, nothing was paid. Do not send anything, stop replying, and report the buyer.

Q: I sent the "upgrade fee". Can I get it back? Maybe, if you move fast. Call your bank straight away and ask them to recall the payment, then report it to Scamwatch.

Selling locally on FlyerBoard? Meet nearby, take payment in person, and report anything that looks suspicious from the chat.