Tip 2. Use Common Sense with Social Money Transfers
In Venmo, the social posts that you submit with your money transfers show up in a feed that, depending on your privacy settings, can be public for anyone to see, visible to friends only, or kept private. As with all social media outlets, users should be mindful (and mature) about what they post. Case in point, a boyfriend sent his girlfriend money in Venmo and jokingly put “bj” in the note attached with the payment, though with a private setting enabled. The girlfriend is in a legal dispute with her ex-husband, who acquired the private Venmo data through discovery, then used the note during a jury trial to assert that girlfriend/ex-wife is a prostitute. (Yes, there are a lot of privacy/discovery/evidentiary issues here; just be mindful of what you write, even if you use a privacy setting.)
Tip 3. When Using Zelle, the Burden Is on You to Be Certain You Are Paying the Right Person
In the words of the New York Times, “Fraud is Flourishing on Zelle.” Zelle was created in 2017 by some of the largest banks in the United States to enable instant digital money transfers. Unfortunately, its instantaneous nature makes it popular with fraudsters. Customers are finding themselves duped into sending payment via Zelle, and banks are claiming to be off the hook. The federal law covering electronic transfers (Regulation E) generally requires banks to cover “unauthorized” transactions. If you, as the user, initiate the transaction and send money to a phone number or email address, you have “authorized” the transaction. It’s a murky area that scammers are happy to exploit.
Tip 4. Good Samaritans Beware of This Venmo Scam
A North Carolina woman was working from home one day when she heard a knock at her door. A stranger stood there claiming he was locked out of his car and needed help. The woman loaned him her phone when he asked to text a sibling. The man then used the phone nearby and returned it to her. During the time he was using her phone, he used Venmo on her phone to send two charges totaling more than $1,000 from her bank account.
Tip 5. But Wait, There Are More Venmo Scams
We’re not trying to rag on Venmo, but even the company has a web page dedicated to common Venmo scams because they are so prevalent. Before using the service (or before the next time if you are already using it), check out their website.
Pay attention to the scam where someone pretends to be your friend and requests money. Scammers can change their username and profile picture to impersonate someone they see appear in your social feed. The scammer then targets individuals who have transacted with your friend in the past, such as yourself. If you get an unexpected request for money, double-check that it is your friend and not an imposter. You can always reach out to your friend (outside the app, via a phone call or text message) and verify that the request is legitimate.
None of this advice is intended for your use in business transactions, but rather to guide you or your loved ones when using these payment methods in your personal lives. With the convenience they offer comes a need to use greater caution to protect your financial assets. Different systems are popular with different generations, so it is important to be familiar with them and the precautions to be exercised with each. Happy spending!