Millions of people are using money
transfer apps but what are the risks?
Money transfer apps have made it easy for friends to split the bill and for parents to send funds to their children. However, the rise of these apps are attracting scammers who are committing fraud on platforms like opens in a new windowVenmo®, opens in a new windowCashApp, opens in a new windowZelle® and even PayPal. While the apps themselves are safe to use when transactions are authorized, the effectiveness of these tools is also a partial downside.
With many of these apps, if you send money to another individual’s account, there is no way to retract that money. Criminals use this caveat to trick unsuspecting victims into sending payments for falsified products and services. Once they receive the money, they’ll immediately delete the account and block the victim.
Warning Signs to Look For
There are a number of common scenarios and platforms through which these scammers often conduct their criminal activities. If you’re able to recognize that the request for the funds is suspicious in nature, you’ll decrease your chances of becoming a victim of fraud.
False Products and Services
The scammer uses popular online platforms such as OfferUp, Craigslist, Facebook Marketplace, and pretends to sell a product/service.
When the scammer finds a buyer, they’ll request a payment for the product and promise to “ship it” once the money is received. Once the victim sends the money through Zelle, CashApp or other apps, the scammer commits the fraud by deleting the listing and blocking the victim.
Fraud Through False PayPal Invoices
When the victim is selling the product on the aforementioned platforms, the scammer commits fraud by requesting an invoice to be sent to a PayPal account. They’ll claim to make the payment for the product, once they receive the invoice.
After the victim sends the invoice, the scammer sends an email from a fraudulent “PayPal” email address claiming the invoice has been paid. They’ll even tell the victim to check their spam folder! When the email is received, the victim will be asked to send the item to the address listed, which is usually a P.O. box, and will lose their item and anticipated funds.
Tickets and Animals
Last minute ticket purchases are often the breeding ground for scammers. The victim believes they scored a great deal on a ticket to a concert or a game. They send the funds to the scammer’s account who promises they’ll release it once they receive the funds.
With animals, usually puppies and dogs, the scammer posts illegitimate pictures of the pet for sale and requests either the full amount or a deposit upfront before meeting the unsuspecting victim to complete the sale. Once the funds have been received, the scammer will delete the listing and vanish.
More than just a popular MTV show, catfish scammers use romance as a point of vulnerability for the victim. Once they gain the trust of the individual, they’ll start to manipulate the victim and ask for financial help.
After the scammer gets their desired funds through CashApp, Zelle or other transfer app fraud, they’ll disappear or “break up” with the victim.
Source: Federal Trade Commission, Consumer Sentinel Network.
Safety Tips and Practices for Money Transfer Apps
As stated previously, most money transfer apps are secure and have preventive measures attached to them to ensure your safety. It’s your responsibility to be able to recognize a potential scammer and protect yourself from falling victim to their schemes. Below are some tips to help keep your funds safe on these mobile apps.
- Make sure you are sending your money to the correct individual – check for spelling errors, additional letters, etc.
- Only send funds to friends, family and individuals/sellers you can verify.
- Secure the app through pins, fingerprint identification, two factor authorization, and more.
- Be diligent when shopping using online marketplaces. Check for red flags such as grammar mistakes, “only shipping” options, inability to confirm the sellers identity, etc.
- Practice social media safety practices especially when building a relationship with someone that is strictly through the online platform.