3 Venmo Scams You Should Avoid Now
Venmo is a great mobile payment service and a digital wallet that lets you send money quickly to anyone you want. However, beware of the scam taking advantage of a loophole in the system. The app was built by PayPal but unfortunately left open windows for criminals to get in and make victims. Besides the old known trick of crooks sending money on Venmo by accident (or so they say), three other kinds of Venmo scams have been reported lately. Let’s look at all of them.
1. Venmo Bank Account Scam
Watch the video below to see the Venmo Bank Account Scam exposed:
2. Canceled Transaction Scam
The second variation is the Canceled Transaction Scam. The scam happens when selling items and targets the vendors. It works like this:
The seller should hand over the item once Venmo says the money had been transferred to their Venmo account. However, the buyer could easily still ask Venmo to reverse the charge, and the seller would be left with no merchandise and no money.
The loop has been heavily exploited to the degree that the Federal Trade Commission had to step in. It said Venmo did not clearly explain the way money is transferred from a user’s account to his/her bank account and did not have sufficient security guarantees.
One fraudulent transaction was mentioned where a seller handed over a set of limited-edition Yeezy Zebra sneakers (an Adidas/Kanye West collaboration), for $13,550. As explained above, the “buyer” reversed the payment on Venmo right before the seller received the money.
However, after the Federal Trade Commission’s complaint, Venmo did not have to pay any financial penalty in the settlement. It just required to explain Venmo’s policies better and provide better protections for users.
3. People Asking For Your Phone
The third Venmo scam is simply pulled by people asking for your phone seeming to be in need of an urgent call. “My phone just died and I really need to make a phone call home to my daughter. Could I please use your phone for a minute?”, they might say. As soon as they step away from you and pretend to type the phone number, they are actually looking to see if you have the Venmo app installed on your phone. If you do, they open it, and within seconds transfer money to their account. How is that possible?
Venmo’s default security setting does not require a PIN number. This allows you (and scammers, if you give them your phone) to transfer money immediately. Simple. Effective. Risky.
What can you do? Open the app and click the top left icon. Once the drop-down menu opens, click on ‘Settings’ then scroll down and turn on the ‘Touch ID and PIN’. Type a four digit PIN, which you will have to use next time you want to transfer money.
Venmo Scams: How To Report Them
Warn your family and friends about these Venmo scams by sharing it on social media using the buttons provided. You can also officially report the scammers to Venmo itself or to the Federal Trade Commission using the links below:
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