Do you use Venmo, Zelle, Apple Pay, or Cash App? These kinds of mobile payment services – also known as a digital wallet or e-Wallet – refer to an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services. If you don’t have one of these on your phone, odds are good your teen does.
How the Scam Works
If someone unexpectedly sends you money, it’s probably an honest mistake, right? Not necessarily. If you use Venmo or another mobile payment service, watch out for this new-tech twist on a classic con.
You get a message through Venmo. It reads something like, Oops! Can you send that back? You check your balance history and see that someone you don’t know just sent you several hundred dollars. You might think you’re doing the right thing by returning the money, but don’t fall for it.
What’s happening here? Scammers connect stolen credit cards to Venmo (or another mobile payment service) and use the cards to transfer money to unsuspecting users. If you send the money back to the scammer, they’ll delete the stolen credit card from their account and add their own card in its place. The money you’re sending goes to their personal card. When the stolen funds get removed from your account, you’ll be out that money.
This scam is just one of many that are perpetrated using mobile payment services apps. Be aware that unlike credit cards, many digital wallet vendors will not shoulder the cost of fraud. If you pay scammers using a digital wallet, you may not ever get reimbursed.
Protect Yourself from Digital Wallet Scams
Protect yourself when paying with a money transfer app by following this advice:
Use money transfer services only with friends, family members, and people you know well. Protect yourself from scams by only using money transfer apps for their intended purpose: sending money to people you know personally.
If someone sends you money by mistake, ask them to cancel the transaction. The sender can request that the vendor cancel the transaction. If the person refuses, it’s probably a scam.
Enable additional security settings. Check your account settings to see if you can turn on additional security measures, such as multi-factor authentication which requires a PIN or fingerprint recognition.
Link your money transfer app to a credit card. As with many other purchases, using a credit card will help protect you if you don’t get the goods or services you paid for. Linking to a debit card or directly to your bank account does not provide that added protection.
Mobile payment services are here to stay and in high demand, especially as touch-free payment options become more important during a pandemic. To keep your family and funds safe, stay on top of the many ways people can abuse this technology.