Whether you’re a frequent user or a sporadic user of the payment app Venmo, you need to be aware of a new scam making its rounds. If you’re not armed with the knowledge of recognizing and avoiding this and other emerging scams, you are more likely to be victimized. Digital fraudsters are becoming more sophisticated with their schemes, and if you’re not alert, they’ll use carelessness and compassion to attack via your Venmo account.
What’s the Scam?
Let us get you up to speed on what we call “stranger danger,” which begins when an unfamiliar person sends you money through the Venmo app. Shortly after the transaction, they message you via the app stating they “accidentally” sent you the funds. Then they ask, would you mind sending it back? Your compassion kicks in since you don’t know them or the reason behind the funds’ deposit. Empathetic, you believe they made an honest mistake and will otherwise lose their money. After all, it’s not your money; it’s theirs, right? The problem is, that this person is often a scammer, and they are counting on your honesty to refund them the money.
Here is the bad news. The perpetrator ensnares two victims—the owner of the stolen debit or credit card used to send you money, making you their potential second victim. Not following? Do you recall the stranger’s payment via Venmo? In reality, it was funded utilizing a stolen credit or debit card account belonging to the first fraud victim. The scammer anticipates that you will refund them the accidental payment before the card owner reports the theft on their account. Why? Once the theft via card is reported, issuing companies most likely reverse the disputed amount. Congratulations to the card owner, as they are made financially whole again. However, the deposit you received has also been reversed due to its fraudulent source. Wait a moment; if you kindly issued a refund, you’ll be stuck holding the bag—out the amount you sent to this stranger. Payment apps do not refund monies to fraud victims. Sadly, you’ve been taken advantage of. Your money is gone.
What Should You Do?
The best thing you can do is ignore the transaction and the sender. The transaction will be canceled since the money is stolen, and you will have lost nothing. You haven’t gained anything either, so don’t spend this money. You’ll also want to report the scammer and the fraudulent activity directly to Venmo.
Next, update your privacy settings within the app to create an added layer of security moving forward. Within settings, mark the default privacy settings as private. Next, scroll to your friend’s list and make that private, too. The goal is to eliminate the inherent social networking aspect of the app, improve your privacy, and retain control of your funds.
How Do You Report It?
Thankfully, Venmo has a resource page on its website that walks you through various scamming scenarios step by step. Never click on any links or attachments that aren’t familiar to you, never trust anyone who greets you as “Dear User” or “Dear [email address],” or any person who expresses a sense of urgency about returning the money they’ve sent you. If you suspect a scam, take a screenshot of the activity should you need any evidence, and be diligent about changing your password.
Scammers are good at what they do. We expect their continuing evolution until the glare of the public spotlight brings attention to the technique. When in doubt, protect yourself by always suspecting a scam and let your stranger danger radar become a protective beacon.
At Organized Instincts, our daily money managers help educate and empower you to recognize payment app scams. Schedule a call to discuss how a daily money manager can help protect yourself, your spouse, and your teens when utilizing Venmo and beyond.
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