Teenagers who use the popular buying and selling website Depop are being warned to wise up to how it works or risk losing their money, according to one young woman who lost her iPhone to fraudsters who targeted the site.

Carrie Fry (not her real name), an 18-year-old from London, contacted Guardian Money after realising she had been duped when selling her mobile phone on Depop. The app, which few over-30s may have heard of, has been described as a cross between eBay and Pinterest.

Having agreed a price and receiving an apparent PayPal confirmation from the buyer, Fry sent the phone to an address in Reading. But the confirmation email turned out to be fake and Fry lost her phone. She is the latest young person to lose out after using Depop, with reports on the internet and social media suggesting she is far from alone.

Depop uses a mobile app that works in a similar but more informal way to eBay. Teenagers particularly like it because it’s quick and easy to use. Users invite bids for items they have put up for sale, which they can accept at any time. Often, they are selling items they have created themselves.

While many products being bought and sold via the app are lower-value fashion items, there is also a host of expensive objects for sale, including mobile phones and concert tickets, despite the fact that sales of the latter are banned on the site.

However, it is clear that many users don’t understand what they need to do to protect themselves, or are choosing to ignore the risks to save money. Fraudsters appear to be targeting the site in the knowledge that many of its users are overly trusting of the internet and thus more easily exploited.

Fry says she advertised her iPhone 6 on Depop for £180 and, after having received eight offers, someone offered £250.

“I told the buyer the phone was not worth that much and said £220 would be fine, Fry says. “Through the conversation, the person was pleasant and told me the iPhone was for her daughter whose birthday was in two days, which why she was willing to overpay,” she says.

She now knows her mistake was to not accept payment through the Depop app. She says the fact that the site charges a 10% commission was a factor in her asking for the payment to be made directly to her PayPal account.

“The deal was confirmed and I sent her my PayPal details, she claimed to have paid immediately and soon after a confirmation email came through.

“The name was different to that used in her Depop account and she explained this was because she was using a friend’s PayPal account as she didn’t have one.”

Fry posted the phone to the buyer’s address. “The payment email was a clever fake and soon after the thief’s Depop account had been deleted,” Fry says. She has since learned that because the transaction was made outside the Depop app’s payments system she has no protection and has lost her money.

The National Fraud Intelligence Bureau told her it was possible her case would be passed on to the police as she had the fraudster’s full address and that the police would get in touch if they needed further information. However, she says she is not holding her breath.

A spokeswoman for Depop says the company was set up in 2011 by Simon Beckerman in Milan but is now based in London, and that it takes its responsibilities seriously. Depop is one of a number of websites that are challenging the likes of eBay and conventional retailers. When it started out, Depop had its own payment wallet but has since moved to a PayPal-based payments system to improve security.

“Our team works hard to make sure Depop is a safe place to buy and sell, and we don’t take these matters lightly,” the company’s spokeswoman says. “Unfortunately, your reader has been requesting transactions to be made outside the app. When someone transacts outside the app we are unable to trace it or assist with a reimbursement.”

She says clear warning signs appear every time a user sells something to remind them to pay only within the app, which in turn protects the purchase.

She says Depop deleted the account used to buy Fry’s phone after detecting other suspicious activity. Despite this, it has not offered her any compensation.

The spokeswoman accepts that many sellers are offering items such as concert tickets that are on the banned list but says it struggles to remove them all as the sheer volume makes this difficult.

Although the company maintains that enough warnings are in place, when Money used the site for the first time we had to seek out the security and safety information. How much of this is being read by teens is open to question. For her part, Fry says she hopes her story will make others look at the way they use Depop.

Martin Lane, managing editor of Money.co.uk, says the majority of buying and selling apps such as Depop are safe, but only if used properly.

“Depop has buyer and seller protection that covers all transactions made within the app. However, all purchases done outside of this are at your own risk. If you don’t receive your money or goods you’ll have no cover and will be left out of pocket. To get protection on your money or goods you must comply with its terms and conditions.

“If someone offers to pay you outside of an app to avoid charges you only have the word of a stranger to go on, which is incredibly unsafe and could leave you out of pocket.”