Payment App Fraud is Surging

Payment app fraud is on the rise. Here is how you can protect yourself.
payment app fraud

Scammers often prey on senior citizens. Older adults tend to be good-natured and not as tech-savvy as their kids and grandkids. But scams are growing every day in 2021 and no generation is immune from fraudsters, particularly when it comes to payment app fraud, as one Texas school teacher recently learned. 

Charee Mobley, 37, noticed an incorrect charge on her Cash App account and called what she thought was a helpline. It was actually a fraudulent number, and the person on the other line drained her account. 

This woman is not alone. The number of people who lost money through payment apps like Cash App, Zelle Venmo and PayPal doubled last year, according to the Federal Trade Commission. Let’s dive into why this is happening and what you can do to protect yourself.

Why is Payment App Fraud Surging?

During the COVID-19 pandemic, more people have chosen to bank from the safety of their homes instead of at a brick-and-mortar location. The popular app Venmo experienced nearly a 30 percent increase in users in 2020, according to a New York Times analysis. Payment apps give them the flexibility to pay bills online and send money to family and friends. Users can tie their bank account, credit card or debit card to the app. It’s easy, fast and free.

payment app fraud is surging and you need to stay safe

But even before the pandemic, cash apps left users vulnerable to scams. Payment app fraud is three to four times higher than credit or debit card fraud. The “ease” and efficiency that draw people to use these apps is actually one of the biggest downfalls. In traditional banking, it takes a couple of days to transfer money. People can figure out if a charge is fraudulent and call the bank. On cash apps, all users need to do is tap their screens a few times, and their money’s gone. 

It’s also a cinch to sign up. Users simply need an email address, making it easier for bad actors to log on and request money from someone. Some of the apps, like Cash App, do not even have an actual helpline, therefore opening the door to fraudsters to set up fake lines, which makes it difficult for customers to recoup lost money. 

How to Protect Yourself From Payment App Fraud

With so few buffers, it’s easy to fall victim to mobile payment app fraud. But you can take a few simple steps to avoid getting taken advantage of on cash apps.

  • If you are sending money to someone, ask them for their username. Before you click send, double-check that the username is correct.
  • Only send money to people you know.
  • Don’t use cash apps to pay for goods and services.
  • Fraudsters often prey on victims by telling them their loved ones need financial help or that they need to send money to fix a tech problem. Verify these requests with the loved one or company that makes the device in question. 
  • Remember that the IRS does not collect money through cash apps. 

If you have been a victim of cash app fraud, report it to the FTC and law enforcement. They may be able to help you recoup costs, and you’ll help protect others from the scammer. 

Have another question? Ask an expert.

Our team is here for you. If you have a question about caring for an older adult or other member of your family—be it physical, legal, medical, financial, or anything in between—we’ll have one of our Trusted Advisors get back to you ASAP.

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