Venmo Scams: How to Protect Yourself From Becoming a Victim

Whether you forgot your wallet at home, or you’re splitting a dinner bill, Venmo offers a simple and quick way to send money. 

Venmo’s mobile payment service allows for quick payment of loans and other cash transfers.

Because of the ease and convenience, many people trust Venmo -- maybe to a fault.

The reality is:

Venmo, like any form of financial payments, is used to scam unsuspecting victims out of their money.

Learn what to look for and what you can do if you think you're being targeted in Venmo scam.

What is Venmo and How Does It Work?

Venmo is a popular app available on Android and iOS devices.

It functions as a peer-to-peer payment system, where you can easily and quickly send money to family, friends, or anyone in your contacts. 

Venmo is owned by PayPal and works similar to this service. One main difference between the two is that PayPal is also heavily used by companies.

Venmo, on the other hand, is designed specifically for money transfers between people who trust each other.

But as Venmo has grown in popularity, many people now use the app as a payment system when selling goods to people they don’t know. 

It can work in this regard, too.

Yet the problem with using Venmo in this situation is that you’re dealing with people you don’t know. And as a result, some people might take advantage of you and use the app to steal your goods or money. 

And unfortunately, if you become a victim of Venmo fraud, the company might not offer any type of buyer or seller protection.

Venmo has made it explicitly known that the service “should be used between friends and family.”

Common Venmo Scams to Watch For

Venmo scams take many different shapes and forms, and some potential scammers are easier to pinpoint than others. 

After speaking with someone about buying goods, you might get a weird vibe and feel that the person isn’t being honest. It’s always best to follow your gut and walk away from the transaction—just in case.  

Other scammers are clever and know exactly what to say to gain your trust.

This is particularly true of those who’ve made a career out of scamming others.

They know how Venmo works and how to use the system to their advantage. And unfortunately, some innocent people suffer the consequences. 

Here’s a look at a few common Venmo scams.

1. Buying items with a stolen credit card

The Internet has made it easier to sell personal belongings such as cell phones, electronics, computers, designer bags, etc. 

You have your pick of online marketplaces to list goods sales, and with so many money transfer services, getting your cash has never been easier. Just know that scammers can use Venmo to steal your items. 

It often plays out like this:

  1. The scammer responds to your ad and expresses their intent to pay for goods with Venmo.
  2. They send a payment and pick up the item soon thereafter. 
  3. As the seller, you think the transaction is over and done with. But what you don’t know is that the scammer funded their Venmo account with either a stolen credit card or stolen bank information. 

Venmo eventually discovers the fraud, at which point the company reverses charges made with the stolen information.

If the money is still in your Venmo account, the company takes it back and you’re left without payment for sold goods.

But if the money is no longer in your Venmo account, you’re responsible for paying it back.

2. Text phishing

Phishing doesn’t only take place through email. It can also take place through text message. And some Venmo scammers use this method to get another user’s account information. 

The scammer sends a text message, using the company’s fonts and colors to make the message appear authentic.

The message asks the user to follow a link and enter personal information to verify their account. 

Now:

The problem, though, is that the link redirects to a fraudulent site.

If you fall for this scam and enter your credit card or bank account number, the scammer can steal your information and use it for fraudulent activity.

3. In-person texts

Some scammers are bold and will steal your money in-person. 

While you’re out running errands, some random person will approach and ask to use your cell phone. They might give a sob story about their car breaking down and their cell phone dying. 

The scammer pretends to make a call, and when no one picks up, they ask to text a friend or family member using your phone. 

If this person seems trustworthy, you might allow it. But in most cases, it’s all a ruse.

Instead of sending a text, they’ll open your Venmo app and transfer funds from your account to theirs. 

4. Mysterious money in app

You should also be on high-alert if money mysteriously appears in your Venmo account. 

This is how it works: A scammer will send you money using a stolen credit card or bank account number. Next, they’ll send a message saying that the payment was a mistake, and ask you to refund the money. 

The problem with refunding the money is that Venmo will eventually discover the scam when the original victim contacts their bank to report the fraudulent activity. Venmo takes back all money linked to the fraudulent activity. 

If you refund money to the scammer “before” Venmo reverses the transaction, you’re on the hook for the funds. So the best thing you can do is leave this money in your account. 

If it was truly sent by mistake, the sender can sort out the details with Venmo to have the transaction reversed. If it’s fraud and Venmo takes back the money, the company will deduct the money from your account balance.

How to Identify a Potential Venmo Scam?

Identifying a potential Venmo scam is easier said than done, especially since scammers can be charming and charismatic. 

There are, however, little tell-tale signs that someone’s trying to take advantage of you.

This includes:

  • someone goes over and beyond to appear trustworthy
  • sob stories
  • offers of a generous financial incentive

Scammers win by building trust in their victims and appealing to their emotions. Always keep your guard up to avoid issues.

Lack of protection

To reiterate, if you’re a victim of a scam, Venmo doesn’t typically get involve or offer any type of protection.

Still:

You should report fraudulent activity to the company so they can warn other customers. 

You should also take steps to protect your credit and finances. Check your bank or credit card statements thoroughly for unauthorized transactions, and then dispute these with your bank.

Your bank or credit card company will cancel the stolen card number and issue a new number.

Also, if you provided personal information like your Social Security number, check your credit reports to make sure no one has opened a new account in your name. 

If you’ve been a victim of identity theft, report the theft to the Federal Trade Commission.

Here’s how to protect yourself from a Venmo scam, or any scam:

Set up multifactor authentication

When Venmo doesn't recognize the device accessing your account, it will send a code to your phone or email address to verify the login. 

Don’t use Venmo to sell goods

When selling goods, chances are you’re dealing with people you don’t know. You don’t know their character, morals, or their intentions.

To safely buy and sell items online, except cash or use a secure payment system like PayPal with buyer protection.

Don’t click links asking for personal information

If you receive a text or email asking for personal information and it appears to come from Venmo, ignore it.

This is how a scammer collects information on their victims—credit card numbers, bank account information, and Social Security numbers.

If you don’t know whether a message is legitimate, open a new web browser and access the company’s site this way.

Don’t let anyone use your phone

If a stranger approaches and asks to use your phone to send a text, don’t give them your phone.

Enter the recipient’s phone number yourself and allow the person to dictate their text message while you’re holding the phone.

Leave mysterious money your account

If money mysteriously appears in your Venmo account from an unknown sender, don’t send it back -- even if the sender requests it back or even Venmo tells you to send it back.

If the payment was sent using a stolen credit card, you could be responsible for the balance if you send it back to the scammer.

Rather:

Ask Venmo to investigate the case and to send the money back. Then, close the Venmo account.

Final Word: Use Venmo Responsibly

Venmo offers a fast, simple, and convenient way to transfer funds.

But this app isn’t designed to send money to people you don’t know. It’s a peer-to-peer payment system for people who trust each other.

So one of the best ways to avoid being a victim of fraud is to use the service for its intended purpose.

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