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This online payment scam could cost you thousands

"You made an innocent mistake, and you paid for it." That's the kind of response you can expect to get back from Venmo, one of the biggest and fastest-growing online payment companies, if you fall for this very tricky scam.

Venmo is a fast, easy way to transfer money between friends, say to pay your half of the rent, or to split a check at a restaurant. But Slate found four users who'd been scammed by people taking advantage of a technicality in Venmo's user agreement.

Most victims were selling items on Craigslist, like basketball tickets or a laptop. But after believing they'd been paid and giving up the merchandise, their transactions were reversed or their accounts were frozen. The person sending the payment had reported them for violating the terms of the user agreement and received a refund.

The issue in the user agreement is this line: "Business, commercial, or merchant transactions may not be conducted using personal accounts." So while sending your share of the rent to someone is OK, "event tickets and Craigslist items" probably aren't, according to the terms you agreed to as a Venmo user.

One victim contacted by Slate had gotten an email from Venmo's head of fraud, stating, "Venmo has a complete understanding of the scam plot you fell victim to ... there is nothing Venmo can do to comfort you."

Although Venmo is owned by PayPal, it doesn't have the same buyer and seller protections that PayPal does. Venmo's general manager, Michael Vaughan, told Slate, "[Venmo] is intended to use with people that you know, and there are certain limitations on how much we can protect people."

In all of the scams Slate encountered, the victims didn't know the person they were dealing with well. So if you're a Venmo user, ONLY use the money transfer service with people you're actually friends with.

For more on how to protect yourself in cyberspace, visit our Komando.com Security Center. And for news on all the latest scams, hacks and cyberthreats, check back often to our Happening Now page.

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Source: Slate
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