When used properly, cash apps like Venmo can be a safe and convenient way to pay people you know for shared expenses. However, to do so, you'll need to link your bank account, debit card, or credit card to the account—meaning there are ways that your transaction could go awry. In fact, a recent survey conducted by Security.org found that scams are surging on cash apps. Sixty-eight percent of peer-to-peer payment app users reported that someone had scammed or attempted to scam them in 2022, up from 42 percent in 2021. The key, financial and online safety experts say, is to spot the signs of a scam before it's too late.
"Venmo and similar apps are extremely popular platforms for scammers, largely because it is so hard to recover money sent through them," says Zulfikar Ramzan, the chief scientist at Aura, an AI-powered family online safety platform. Wondering if you're getting swindled on your cash app? Read on for the top five red flags about using Venmo.
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1 | Overpayment or mistake payment scams
Prostock-studio / ShutterstockThe first rule of Venmo is that you should really only agree to transactions with trusted parties. Ramzan says that if someone you don't know "accidentally" sends you too much money for an online payment and then asks for a refund, there's a good chance you're being roped into a scam.
"In reality, they've used a stolen credit card or bank account to make the transfer," he tells Best Life. This can leave you high and dry if authorities discover the fraud.
"In a sense, you're unintentionally laundering the money for them, and when the credit card companies correct the fraud, you'll be out the extra cash," explains Gillian Dewar, chief financial officer of Crediful.
2 | Impersonator scams
ShutterstockAnother way that scammers can get to your money is by impersonating someone you actually do know and trust. That's why it's so important to verify the user handle of anyone you plan to send money to or receive money from before completing a translation.
Ramzan notes that oftentimes, the impersonator will claim to be one of your friends, say they're in some sort of trouble, and ask for an urgent payment to help. Rather than sending cash, you should call that person to verify that they are in fact behind the request, and make the decision on your own time.
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3 | "Free" money scams
ShutterstockAnother common Venmo scam begins with a text or email informing you that you have won a contest, says Jake Hill, a finance expert and the CEO of DebtHammer Relief. Alternatively, someone may claim that you're receiving a reward for being a loyal Venmo customer.
"In this scam, the individual is counting on your excitement about winning something to cloud your judgment and encourage you to provide personal information that allows them access to your account," Hill tells Best Life. "Unless you are 100 percent sure you actually entered a contest, do not click any links in the text or email you receive and delete them immediately."
4 | Grammatical or spelling errors
Prostock-studio / ShutterstockGrammatical or spelling errors are another surefire red flag that something fishy is going on—"especially in the spelling of your name," says Hill. "Official communication from Venmo does not contain these types of errors, so these messages should automatically be disregarded as fraudulent."
5 | Fake Venmo employee scams
Carlos Pascual/iStockFinally, if you receive a call or text from a supposed Venmo employee and they request that you verify your personal or financial information, this is also a scam, Ramzan warns.
To get your guard down, they may claim that someone has signed in from an unknown or unauthorized device, or that there has been a suspicious transaction. If this happens, hang up and call Venmo's customer service line directly to notify them that this has occurred.
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