
In 2021 and the first half of 2022, banks in the US reported 192,000 cases, or one in ten, of crimes perpetrated on customers using the payment app Zelle. Less than 3,500 clients got refunds out of all those cases.
Venmo, Cash App, and other apps like Zelle make it simple to transfer funds to pals or use them for shopping. In contrast to credit cards, there isn’t much fraud protection against a payment app scam, where an actual representative can stop a fraudulent payment.
How it works
A customer receives a call from someone claiming to be from their bank. Often, it starts with phoney emails, messages, or direct messages. The caller ID typically matches the person’s bank. The familiar story is that there is account fraud.
The impostor always requests the user to confirm a sizable, fictitious payment and calls the user again after they say they didn’t authorize the transfer. They lead the user through fictional steps to resolve the problem. In the interim, and in minutes, money from the user transfers to the scammer’s account.
In Boston in 2020, a woman received a text message that looked like it was from her bank. She provided the would-be customer support representative with details on her account. The imposter made a Zelle transfer of $30,000 from her account into the scammer’s account.
The chances of getting your money back depending on the payment app. Approximately 47% of consumers could get their money refunded using PayPal, whereas relatively few people could do so using other programmes. Only 14% of people who use Venmo got their money returned, compared to 3.7% with a Cash App and less than one with Zelle.
How to protect your money
Before sending money, ensure the phone number or email address is correct and limit the recipients to persons you trust.
Second, link a credit card rather than a bank account to your payment app. Compared to app accounts, credit cards provide more safety for permitted transactions.
Finally, use a biometric passcode, such as a fingerprint, to ensure that only you can access the app.
And as a reminder, support from the payment app will never ask for payment or sensitive information, such as your complete bank account information. Consider before downloading any software the scammer may recommend if it’s not tied to your payment app.
Following cyber-safe best practices like monitoring and avoidance tips can help you and your family protect your family against payment app scams. We work too hard for our money.
To learn more about consumer concerns and payment app scams, romance scams, and other scams, you can download our mobile app, FRAUDSTER, available on Apple and Android. You can learn more at www.FraudsterApp.com
If you’ve already downloaded the FraudsterApp, click the training icon on the home screen to learn to protect yourself.