Illustration by Philip Smith for Forbes
The holiday season is busy one for fraudsters. This round-up story will pull out five common scams people pull on cash apps like Venmo, CashApp or Zelle. One example are accidental payment scams, where users are told money was sent by mistake using stolen credit card information. If they send the funds back, they risk being stuck with the loss.
Payment apps like Venmo, Cash App, PayPal and Zelle have revolutionized the way people send money for everything from check splitting among friends to monthly rent payments. Unfortunately, scammers are evolving with the payments landscape and have come up with a raft of tricks to siphon customer funds from these payment methods into their own pockets.
Consumers are used to being protected from certain fraud losses – most notably, bogus charges on their credit cards. But with payment apps, customers’ digital funds are treated as cash, making it difficult for victims to recover fraud losses if they have been tricked into approving a payment. In fact, under current federal regulations for electronic fund transfers in the United States, if a customer makes the mistake of authorizing a scam payment, he’s not entitled to any reimbursement from the bank.
Industry pros refer to cases where folks are tricked into sending money to the crooks’ accounts as authorized push payment (APP) scams and say they’re growing quickly. In the United States, APP scams could cost consumers $3.1 billion by…
