When Selling Online, Avoid Venmo Payment Scam
For those who haven't yet heard of it, Venmo is a handy app that facilitates payments, not unlike PayPal. It's especially useful for friends to pay each other for bills, like splitting a dinner check, putting in your share of the rent, and paying a buddy back for spotting you a few beers. Just find your friend, type in the amount you want to send, and voila -- they're paid.
The only problem is, the payment doesn't quite happen as instantaneously as the app says. There can be a delay between getting that "cheery green plus sign" in the Venmo app and getting the funds into your bank account. And scammers are taking advantage of that loophole to take advantage of trusting sellers.
The scam works something like this: You want to sell something online, like baseball tickets. You advertise the tickets online and someone says they want them and they'll pay you via Venmo. You see the payment confirmation in the Venmo app and mail the tickets. But then when you check your bank account, the money never arrives.
That's because Venmo adds the money to your account in the app, without actually putting it into your bank account. And in the time it takes for the funds to be transferred from Venmo to your bank (possibly 1-2 business days), that special someone reversed the transaction, keeping your tickets and his money. As Slate's Alison Griswold noted:
These Venmo scams work so well because the scammers know a few things that you don't. They are taking advantage of your assumption that because transacting on Venmo is simple and quick, it is also always safe ... Most importantly, they are exploiting the little-known fact that funds flickering onto our phone screens with a perky green plus sign and a couple emojis are not really ours as instantaneously as they may seem. In short, these scammers are slipping into the gap between what Venmo has taught us to expect and the reality of what both the company and America's underlying financial infrastructure are actually able to handle, and they're blowing it wide open.
What most sellers using Venmo to process payment fail to realize is that they are violating the app's user agreement: "Business, commercial, or merchant transactions may not be conducted using personal accounts." So while paying back a friend is legit, paying for products and service isn't. And Venmo isn't rushing to help customers who've been scammed, instead freezing sellers' accounts for violating the user agreement.
So feel free to use Venmo when you're amongst friends, but for strangers use something a bit more secure.
- Scammers Using Venmo to Fool Sellers (Better Business Bureau)
- 15 Online Behaviors That Make You Vulnerable to Scams (FindLaw's Common Law)
- Online Shoppers: Beware 'Order Confirmation' Email Scams (FindLaw's Common Law)
- Beware This PayPal Scam: Email Says Money Posted in Your Account (FindLaw's Common Law)
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