Don't want to deal with paper money and coins due to the risk of catching COVID-19? Money transfer apps like Cash, Zelle, or Venmo may sound ideal, as you don't have to handle paper cash.
But scammers are preying on new users of the apps during the pandemic, and it is essential that you know the risks.
Mark Fisher didn't want to deal with paper money anymore, so he downloaded the Cash App on his phone. But when a recent payment to his storage unit failed to go through, he decided to call the money transfer company to see what the problem was.
"I Googled some numbers, and found some numbers online for Cash App," Fisher said.
He called what appeared to be Cash support or customer service.
"So they started asking me for some information, and I gave them my name, stuff like that," Fisher said.
The agent told Fisher that he needed to check his account.
"They started sending me these codes, through my phone, telling me to text them the codes back," Fisher said.
All of a sudden, Fisher said the agent hung up, and $3,400 was missing from his bank account — gone in a second.
"They drained the account," Fisher said.
It turned out the number Fisher found on Google was not the number for Cash App support, but a scam.
Money transfer apps come with risks
Money transfer apps have become super popular during the pandemic because users don't have to deal with human tellers, drive-up windows, ATMs, or traditional bank fees.
But they also don't come with the same protections as traditional banks, as it is usually impossible to reverse a mistaken or fraudulent money transfer.
Consumer Reports magazine says there are risks with all money transfer apps — Cash App, Zelle, and the biggest one, Venmo, with thousands of people reporting that they lost money through an error or scam.
Consumer Reports says:
- If you send money to the wrong person, it is gone forever in most cases. This can happen if you simply type in a wrong phone number, and that person has the same app you are using.
- Beware calls and e-mails from the apps: They are almost always scams.
- Be very careful Googling for customer service or support. Use the app itself, or its website to find help.
The very same thing happened last year to Damon Lander, who said his Zelle account was drained by a phone scammer.
Fisher wishes the apps had some sort of extra fraud protection built in to prevent a scammer from grabbing an unusually large amount of money.
"I've never sent anyone $3,400 on my card. That's all I had," he said.
Cash App did nothing wrong, nor was it hacked.
The good news: Cash App agreed to make Fisher whole after learning about his story, and has now restored the $3,400 to his account.
Cash App did not say whether it is pursuing charges against the scammer.
"We are always working to protect our customers, which includes educating them about phishing scams," the company said in a statement. "As a reminder, the Cash App team will never ask customers to send them money, nor will they solicit a customer's PIN or sign-in code outside of the app. If you believe you have fallen victim to a scam, you should contact Cash App support through the app or website immediately."
The key is to be so careful who gets your account info so you don't waste your money.
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