Devin Venmos Nessa $15 for “fur babies"...
Paula Venmos Jane $43.52 for “W/D"...
Angie Venmos Libby $9.55 for “DayQuil for Duncan"...
and Hilltopper Harry Venmos Johnny One-Time $25 for “1st place in cotton ball game.”
Sounds innocent enough but privacy experts say that while “venmoing” may seem like a straightforward little social media verb among friends, consumers are exposing themselves to scammers.
Scammers are deft enough to connect with Venmo users in ways those users aren’t aware of and don’t see it happening before their very eyes. It's a situation so bad that even Amazon decided to cut and run from Venmo.
Innocence isn’t bliss, however. Ask Georgia from Austin Texas who found out that when she sent $446 to a friend via Venmo to pay for a trip they split, she had sent it to her friend’s old email address which had since been taken over by a scammer.
But because Peer-to-Peer (P2P) apps such as Venmo, Zelle and PayPal don’t offer buyer protection on consumer’s accounts like FDIC-insured banks do, Georgia soon found out that Venmo wasn’t on her side but rather the one who ripped her off.
“[I received an email saying] ‘Don't worry, we covered you and your friend has the funds,’” Georgia told us. But when she tried to correct Venmo, the company turned on her and told her “You now owe Venmo $441.82. Your account has been frozen (you cannot send payments or transfer to your bank) until you settle this debt."
Proof is on the consumer
As Georgia and 68% of peer-to-peer payment users in 2023 who experienced some form of attempted (or successful) scamming activity while using cash payment apps found out, these apps are convenient but they’re also susceptible to scammers. It's up to users to ensure that transactions are legitimate.
And that number is likely to go even higher in 2024 given what ConsumerAffairs recently found out. New research found that 29% of American adults – an estimated 77 million people – had an online account taken over in the past year, a number up seven points from the previous year.
Those researchers found that P2P app scams are becoming more frequent and can happen in several ways, including through account takeovers.
“In fact, we found that after social media accounts, bank/finance accounts were the most likely to be taken over. If someone gains access to your peer-to-peer payment app, they can send money from your account to theirs quite easily. In a recent study, we found that the median financial loss from an account takeover was $180,” Corie Wagner, senior editor for industry research at Security.org, told ConsumerAffairs.
Users are on the hook
“Unfortunately, individual users still bear the burden of protecting themselves from fraud. Becoming aware of the issue and educating yourself on the warning signs of scammy P2P transactions are the first steps," Wagner said.
Then Wagner drew it up in no uncertain terms, saying that if you carry any balance on your Venmo/PayPal/Zelle account, you better get it out of there and transfer it to your checking or savings account ASAP.
"Though P2P apps are super convenient for sending and receiving money from people you know and trust, they aren't banks for storing cash. In a bank account, your hard-earned money is protected by the FDIC.”
If you really want to use a cash-sending app, you might want to consider sticking to GooglePay or ApplePay. As the Identity Theft Resource Center (ITRC) explained to ConsumerAffairs, those are far safer and offer more protection.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-01-25 11:58:15
