How to beat the Venmo scammers: Internet Scambusters #913
Sending and receiving money online from your mobile device is now easier than ever, thanks to apps like Venmo.
But scammers have spotted an opportunity to use these apps to steal your money or your ID, as we explain in this week's issue.
We also have a warning about the danger of mistaking a Coronavirus stimulus payment mailing as a scam.
Let's get started...
Venmo Mobile Cash Users Targeted by Scammers + Coronavirus Scams Update
Users of one of the most convenient and popular mobile payment apps, Venmo, are being repeatedly targeted by scammers.
Venmo, in case you didn't know, is a smart phone app that allows a user to pay or transfer money to other people, a bit like PayPal, which bought Venmo for $800 million in 2013. But it's not the same. It also has social media aspects allowing users to communicate with each other.
According to the Wall Street Journal, Venmo handles billions of dollars every month, and had around 23 million users -- mostly millennials -- at the last count.
To use the free app, you have to connect it to a payment method like your credit card or bank account.
Several concerns about its security have been voiced in recent years. In 2016, according to the WSJ, the US Federal Trade Commission (FTC) publicly expressed concern about its privacy policies.
But that's not what the scammers are aiming at.
Writer Ann Schrader, who has reported on frauds and other con tricks targeting Venmo, says the most common scams exploit user ignorance of the way the app's payment transfer works.
"For example, typical Venmo transactions may look as if they've been completed instantly," she writes, "but take a couple days to process before you actually receive the funds -- leaving users vulnerable to giving up goods before actually receiving the payment in their bank."
So, a scammer may buy and pay for something using Venmo but after the sale (and the shipping), the crook contacts Venmo and asks for the payment to be reversed. Too late for the unfortunate seller.
Family and Friends Only
This happens on trading sites like Craigslist, where buyers, who are not known to the seller, ask them to use Venmo for payment. For its part, Venmo discourages this type of activity, saying the app is meant to be used only between family or friends.
In fact, Venmo's terms and conditions specifically state this, which means that it won't compensate people who use it for online buying and selling and then fall victim to a scam.
"While using Venmo for normal payments within your circle or network (i.e. people you know or regularly interact with) is generally safe," Schrader explains, "be wary of using Venmo as a payment system for things like online ads."
Another Venmo scam identified by Internet security firm Norton uses texts disguised as messages from Venmo to try to steal bank account and other confidential financial information.
The messages tell users their accounts will be charged -- for what, they don't always say -- if they don't click on a link in the text message.
"Once recipients click, the consumer is taken to a website that asks for their credit card number and other personal and financial information," says Norton.
"The scammers then may sell this information on the dark web or use your bank account information to make fraudulent purchases elsewhere."
Yet another trick, which we've reported on previously in a Snippets issue, Recall Notice Scam Tricks Car Owners Into Visiting Dealers, is the digital equivalent of being robbed in the street. A stranger apparently in desperate straits asks a victim if they can borrow their phone.
They delay handing back the phone, saying they need to send a text message because the other party didn't pick up. Then they check to see if Venmo is installed and simply transfer money to themselves.
How to Avoid a Venmo Scam
The most important action you can take to avoid a Venmo scam is to use the app solely for its stated purpose -- transferring money to and from people you know.
So, if you're selling on Craigslist or similar, don't agree to use the app for transactions. If by any chance you think this might be safe for a particular transaction, tell the buyer you won't ship until the payment is in your bank.
And if someone asks to use your phone, either decline or say that you will input the number for them, wait for the other party to reply and then hand the phone to them. Then keep a close eye on their activities.
The FTC also urges caution even if you receive a request for money from someone you think you know. If the request is unsolicited and you don't know what it's for or didn't expect it, call the requester and confirm it.
Finally, of course, you should closely monitor your Venmo and linked payment accounts for any unusual transaction.
And, by the way, other mobile payment apps like Zelle and CashApp may also be vulnerable to this type of scam.
Not a Coronavirus Scam
We've reported recently on many scams connected with the coronavirus (Covid-19) pandemic, but now we're warning about just the opposite -- something people believe to be a scam but isn't.
The misunderstanding relates to the issue of stimulus payments by debit cash cards -- for those who may not have a bank account or whose account details are unknown to the IRS.
The tax agency apparently is sending out four million of these Visa cards, which some people have apparently mistaken as credit card solicitations and have promptly binned them.
Furthermore, even those who have opened the mailing have been concerned because it comes from what tech site Gizmodo.com refers to as a "sinister sounding" sender "Money Network Cardholder Services" and the card issuer Metabank, rather than the US Treasury or the IRS.
So, if you receive cards bearing this information, it's legit.
One final warning, however; if you do receive a card and then get a call from someone posing as an IRS official claiming there's been an error and asking for your card number and PIN, don't hand over the information.
It's a scam. So, hang up.
That's it for today -- we hope you enjoy your week!