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Digital Wallet Scams: Venmo

digital wallet scams

Digital wallet apps are just one of the many technology innovations that aim to make our life easier. These apps allow users to store credit card details, make payments, and easily send and receive money between friends or family. Although this innovative technology is incredibly convenient and great for promoting a cashless world, it has also opened up a new way for scammers to leverage the technology in a new scheme.

The scammers seem to have targeted one of the more popular digital wallet apps – Venmo. This app is commonly used by younger generations to easily transfer money between friends, making it easier to split bills or pay someone back. Here we explain how this digital wallet scam works, how to spot it, and how to protect yourself from falling victim to it.

How Does The New Venmo Scam Work?

Scammers will “accidentally” send a potential victim a significant sum of money and use bad acting to then plead with the victim to send the money back to them. These unsuspecting victims who think they are doing the right thing, will send the money back to them from their own Venmo account, when in actual fact the money that was originally sent to them by the scammer was done so using a stolen credit card. When the victim sends the money back, the scammer removes the stolen credit card from their account and adds their own, receiving the money into their own account.

When the stolen credit card is reported, all funds spent on the card will be reversed, including the funds sent to the victim’s Venmo account. The victim then has the money deducted from their own account instead of the scammers, leaving them out of pocket. What makes the scam even worse for the victims is that it is unlikely they will have their money returned to them by the digital wallet app vendor.

How To Spot A Venmo Scam?

Luckily, this particular digital wallet scam using Venmo is rather easy to spot and losing your money can always be avoided if you take the right next steps.

If someone outside of your contacts “accidentally” sends you money or tries to contact you saying that they have made an accidental transfer to your digital wallet account, then it is likely a scam. The best way to test this is to ask them to cancel their transfer instead of returning their funds to them. If they say, no, using a generic excuse then you’ll know it’s a scam.

The fact of the matter is, you should never send money to a stranger online – especially if it is via a digital wallet app. Unfortunately, it is unlikely that the digital wallet vendor will reimburse you in a fraud case, unlike credit card companies.

It is always best to stay on top of the latest technology news, and learn how to protect your online information.

How To Avoid Falling For A Venmo Scam?

Digital wallet apps have a lot of benefits and shouldn’t be something to fear. As long as you’re taking precautions, you can use them and keep your money safe. Here are a few useful tips to avoid falling for a scam like this:

  • Don’t accept money from strangers: One of the best ways to keep yourself safe online and avoid falling for scams like this, is to avoid engaging with strangers. Be sure you always know who you’re sending money to online.

  • Make use of security features: Digital wallet apps give additional security features which you can usually manage in your account settings. Add two-factor authentication or a security question to make sure you can’t be hacked.

  • Link your digital wallet app to your credit card: Most credit card companies insure transactions in ways that a debit card or bank account don’t. This means that they are a safer option and your transaction can likely be reversed or reimbursed.

If you’ve fallen victim to a digital wallet scam, or another online scam, you should contact the authorities immediately and be sure to change your passwords. The internet doesn’t need to be a scary place if you stay vigilant – educate yourself on the different types of fraud on the internet, and keep checking our blog for the latest on anti-fraud news.