Leave a comment

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.

Next page: Venmo's response and how to protect yourself
Remember that silly Ice Bucket Challenge? Here's how it's worked out so far
Previous Happening Now

Remember that silly Ice Bucket Challenge? Here's how it's worked out so far

Amazon's new Fire tablet costs $50
Next Happening Now

Amazon's new Fire tablet costs $50

View Comments ()