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Digital wallet scam
© Yuliia Kaveshnikova |
Security & privacy

Received money from a stranger on Venmo? Don’t do this

Everybody could use some extra cash in their pocket. While this website can help you save on groceries, it won’t make money magically appear in your bank account. However, some lucky people have been fortunate enough to be blessed with $500 from a stranger.

It turns out that it was by mistake, and the sender now wants the money returned. Before you send the money back, there is one critical thing you must know.

Read on to learn about a clever new scam making the rounds and what you need to outsmart it.

Here’s the backstory

Sending digital payments to friends and family is made easy by tools like Venmo, Zelle and Apple Pay. When you meet a friend for dinner, one person can pay the check, and the other can send them their part through one of these digital wallets.

If you do use a digital payment tool, be careful. The Better Business Bureau (BBB) says you must be aware of a clever twist to an old scam. Here’s what’s happening.

Strangers are randomly sending people money through apps like Venmo. Once you receive money through the app, you’ll get a message from the sender apologizing and saying it was sent by mistake. They then ask you to send the money back.

But here’s where the scam comes into play. The thief sent you payment through a digital wallet using a stolen credit card. They then remove the stolen card and replace it with an account they own. Once you send payment back to them, the money goes into their account, not the one they stole.

Here’s where the scheme gets super sneaky. When the accidental charge is taken from the stolen card, the legitimate owner will contact their bank and have it reversed. When their bank reverses the charges, you’re out of luck. The funds will be taken back from your digital wallet on top of the payment you sent.

Now you’re out of luck, and money.

How to protect against digital wallet scams

Do not send the money back if this scenario ever happens to you. Instead, tell the person who sent the money to ask the vendor to cancel the transaction. No matter how much they beg, don’t give in. You’re not obligated to correct their mistake.

The BBB says, “Be aware that unlike credit cards, many digital wallet vendors will not shoulder the cost of fraud. If you pay scammers using a digital wallet, you may not ever get reimbursed.”

Here are more suggestions from the BBB to protect against digital wallet scams:

  • Use money transfer apps with family and friends – Protect yourself from scams by only using money transfer apps for their intended purpose. Sending money to people you know. 
  • Put the burden on the sender – Ask them to cancel the transaction if someone sends you money by mistake. The sender can request that the vendor cancel the transaction. If the person refuses, it’s probably a scam.
  • Enable additional security settings – Check your account settings to see if you can turn on other security measures, such as multi-factor authentication, requiring a PIN, or using fingerprint recognition.
  • Link your money transfer app to a credit card – As with many other purchases, using a credit card will help protect you if you don’t get the goods or services you paid for. Linking to a debit card or your bank account does not give you that added protection.

Keep reading

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