How to Protect Yourself on Mobile Payment Apps

How to Protect Yourself on Mobile Payment Apps
May 25 07:49 2017 Print This Article

History has taught us that wherever money flows, thieves are sure to follow. Mobile payment apps like Venmo are not to be excluded from this logic, as scammers have already begun figuring out ways to defraud unwary users. The key to avoiding scams is educating yourself, so here are a few words to the wise for all who want to stay ahead of the game.

Easy to Pay, Easy to Steal

Mobile Payment apps make transferring cash really easy. Splitting rent, or the electric bill, or the tab at the bar just became really easy; a few taps of the finger, and you’re done. But easy isn’t the same as secure, and many are now taking advantage of a system that seems straightforward (but really isn’t). Here’s how it works.

When a payment is made on an app like Venmo, it first schedules the payment from one account to another. This is the stage at which you receive a notification that money is “in your account.” It isn’t until subsequent business days that the app actually attempts to withdraw money from the payment account and transfer it to the account of the recipient. That lag is where scammers are having a field day, taking advantage of the ability to cancel payments in process, and denying people access to the money they’ve been promised.

The detail to remember is that these apps function more like checks than they do like cash. The notification of payment isn’t money. It’s the promise of money, and one that can be easily broken.

How to Stay Safe

If you want to protect yourself, first, do your research. The better informed you are, the better you can discern between real scams and alleged ones (such as the supposed ACN scam, which has been misunderstood as a pyramid scheme).

Next, only receive mobile payments from sources you trust (as in, people you know). If you’re doing business with a stranger, apps are no more sure than a paper check. That’s why it’s still safest to insist on cash.

And lastly, read the user agreement on the app you’ve chosen to use. Some scammers are getting away with their crimes by exploiting lines from the user agreement like this one from Venmo: “Business, commercial, or merchant transactions may not be conducted using personal accounts.” Because they’re scamming on transactions that could classify as “merchant,” Venmo’s customer service is less likely to intervene.

Remember, scammers depend on your ignorance and misplaced trust; so make sure you’re fresh out of both.

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Jacques Jeanlouis
Jacques Jeanlouis

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