One company does things a bit differently than other peer-to-peer payment apps. Unlike PayPal and Venmo, the service is frequently used by companies and celebrities for contests on social media. If you tweet certain hashtags when a contest is going on, you could end up winning real money.
Unfortunately, there’s a tradeoff for these fun contests. Scammers are also aware of them — and will sometimes try to hijack the hashtag to trick victims into sending money. Tap or click here to see how some of these scams work.
But now, scammers are trying a new set of tricks to steal money from victims. Unsuspecting users are getting “investment requests” that offer a quick way to make money. But if you take the bait, you’ll end up losing money with no way of getting it back. Here’s why.
A bad investment
Investments can be a great way to turn a few hundred dollars into tens of thousands of dollars without too much effort. But we wouldn’t recommend using Cash App to start your investment portfolio — there are just too many scammers!
According to a report from the Better Business Bureau, scammers on Cash App are using deceptive investment schemes to con users out of money with very little recourse.
Here’s how the scheme works: Cybercriminals post ads or images on social media showing piles of cash. The caption brags about how someone flipped a few hundred dollars into thousands — and a link will be attached so you can try it too.
If you talk to the account-holder, they’ll ask you to send money so you can start investing in the stock market. When you try to get your money back, the account-holder will then tell you that you first need to pay taxes to the IRS. You may also be asked to pay additional fees before you can claim your investment.
But no matter how much you ask, there are always fees and delays coming between you and your money. In truth, an investment was never made and the account-holder took you for a ride. Every cent of money — from initial investment to IRS taxes — went straight into the scammer’s pocket.
This may sound like an obvious trick to avoid, but not everyone is aware of how investing works. Worst of all, payment apps like Venmo and Cash App have very few ways of recovering your funds once they’ve been sent.
Beyond Cash App
Money flipping and investment scams aren’t only popping up on Cash App. Instagram users have also reported several flipping scams coming from direct messages. In this method, scammers will message potential victims and ask if they want to take part in an investment. The rest of the scheme plays out like the scenario above.
But unlike with Cash App, we have an idea of how much these annoying scams have cost people. Reports from cybercrime analysts at Action Fraud U.K. suggest that money flipping scams have impacted Instagram users to the tune of $463,545 in U.S. dollars. That’s an average of $2,825 per victim!
How can I protect myself from money-flipping scams?
As of now, Cash App and its parent company Square are aware of threats posed by money-flipping scammers. They’re advising any customers who have encountered or lost money to scammers contact Cash App’s support team here with details.
There is no guarantee that you’ll be able to recover your lost funds, but it doesn’t hurt to have Cash App investigate what happened. Plus, you’ll be helping protect others from getting ripped off.
Until Cash App figures out who the scammers are and bans them from the platform, here are the best ways you can avoid getting tricked by money-flipping scams.
- Know the difference between a scam and a real Cash App giveaway. Real cash giveaways tend to be run by Cash App itself, partner companies or celebrity influencers. On platforms like Twitter and Instagram, these accounts will have blue checkmarks next to their name to show that they’re verified. Avoid participating in Cash App transactions with unverified or unknown users.
- Search online. If you see a tempting offer like the money flipping scam, do research before agreeing to anything. If it’s a common enough scam, you’ll see results that clue you in on what you need to look out for.
- Watch out for jargon and buzzwords. Any Cash App promotions that use urgent-sounding language, money guarantees and other shady words are not to be trusted. If it’s a real giveaway, you won’t need to send money upfront.
- Treat Cash App like cash. Once you send money via Cash App, it’s gone. Think carefully before every transaction and remember that your money isn’t coming back before you send it.
Are scams getting more obvious or just more common? It’s a bit of both — but never stop being vigilant. If you stay on your toes and watch out for red flags, you’ll be much safer no matter where you go online.