Q: I love the convenience of payment apps, like Cash App and Venmo, but I’ve heard there’s been an increase in scams being pulled off within these apps. How can I protect myself from payment app scams while continuing to use my payment apps without compromising my safety?
A: Payment apps offer users the ability to effortlessly send payments to friends, making it easy to split the tab at a shared meal, buy a present for a mutual friend and quickly pay back a small loan. Unfortunately, though, scammers are using these apps to cheat people out of their money.
Here’s all you need to know about payment app scams and how to protect yourself from being the next victim.
How the scam plays out
There are several variations of the mobile payment app scam, most of which involve the scammer hijacking the victim’s linked checking account or credit card and using it to pay for their own purchases. Now, though, with the COVID-19 pandemic changing people’s attitudes toward money, there is another, more nefarious scam being played out through mobile payment apps.
In this trending scam, a payment app user is invited to participate in a contest on Twitter or another social media platform. The host of the contest is giving away a bundle of cash to one lucky winner as a way of helping them through the economic downturn caused by COVID-19.
After entering the contest, the victim receives a message informing them that they’ve won the giveaway — but they need to pay a small fee to verify their account and, later, receive their cash prize. Thrilled to be the winner and suspecting nothing unusual, the victim will gladly pay the fee and wait for their big payday. Unfortunately, though, the money never lands in their account, and they won’t see the funds they used to pay the “fee” ever again.
In the above scenario, the contest the victim entered may actually be authentic, but the follow-up post they’ve received is the work of a scammer.
Sometimes, scammers send messages to individuals, claiming that the person has been randomly chosen to win a cash prize, despite having never entered any contests. These messages appear to come directly from a payment app and include a request for a small processing fee.
Other times, scammers take the ruse one step further. After asking the victim to send the fee via mobile payment app, the scammer hacks the victim’s linked account or credit card and uses it to make their own expensive purchases.
Scammers use keywords like #coronavirus and #emergencyfunds to make their social media posts appear authentic; their efforts often pay off.
“My goal is to help those in need,” one scammer in Florida wrote. “Your deposit allows us to immediately send you your payment.”
The scam targets any payment app but is especially popular with Cash App users familiar with “Cash App Fridays.” To the unsuspecting victim, the new freebies seem like an extension of the app’s existing giveaways.
Scammers often execute the scam through various social media platforms, most commonly on Twitter. The social media giant is a popular host for contests of this sort, and another cash giveaway hardly stands out. Scammers exploit Twitter’s “Retweet” culture by targeting legitimate contest participants.
“This behavior is absolutely against our rules and outlined as such here,” Twitter spokesperson Lauren Alexander wrote in an email. “Users who see such scams should go to the ‘Suspicious and Spam’ category to report the scam.”
Protect yourself
Luckily, you don’t need to give up on the convenience of mobile payment apps just yet. Learn to spot this scam by understanding its medium and red flags.
Here’s what you need to know about Cash App and other mobile payment apps:
- – Cash App will never ask customers to send it money as a “processing fee” or for “verification.”
– Cash App will not ask users to share their PIN or sign-in code outside the app.
– Cash App currently has only two official Twitter accounts, @cashapp and @cashsupport, both of which have blue, verified check marks. If you receive a tweet from another account appearing to be from the app, it is likely bogus.
Tips to protect yourself:
- – Never send or receive P2P payments from someone that you do not know
– Fund your payment with a credit card. It’s harder to dispute charges with a debit card
– Use payment services that offer buyer protection such as PayPal, eBay, or Amazon
– Create strong, unique passwords
– Use multi-factor authentication whenever possible
– Stay away from public wifi
– Disable auto-login
– If a post or tweet looks suspicious, don’t take any chances; ignore it and move on.
If you suspect a mobile payment app scam, reach out to the app’s support via the app or website. If you report the scam early enough, they may be able to reverse the transaction. Report the scam to the FTC at ftc.gov and warn your friends.
Mobile payment apps simplify money transfers but also increase the risk of scams. Stay alert and practice caution to keep your money safe.
