HOUSTON - Complaints have skyrocketed more than 300% during the pandemic about digital payment apps, such as Cash App, Venmo, and Zelle, according to a new report. Four out of five Americans use these apps.
Peer-to-peer apps allow consumers to send money directly from their bank or credit card accounts to someone else. But the U.S Public Interest Research Group says complaints of people losing hundreds, even thousands of dollars are surging, from 600 complaints in the first quarter of last year to 2700 in the first quarter of this year.
"I saw $150 cash gone out of my account and I was like, whoa, whoa, whoa! You just pulled $150 out of my account. Put it back," said Jim Collier, describing how he says he was scammed.
"We got off the phone and probably an hour later, money was being siphoned from my account as if I was doing it. That $900 one, then a $1300, then a $500," said Emanuelee Bean of unauthorized drafts made from his account.
Victims say scammers call, posing as Cash App employees, and ask to access their accounts. Others describe scammers who ask to be paid through apps, such as Venmo or Zelle, but never deliver what's promised. And banks say once you send the money, there's no getting it back.
"I can't imagine how frustrating it is to get defrauded out of your money and then not have any recourse to getting it back," said Bay Scoggin, State Director of the Texas Public Interest Research Group.
U.S. PIRG is calling on the Consumer Financial Protection Bureau to force payment apps to do more to protect you, like making account settings default to private rather than public.
"It makes much more sense, for example, to have on Venmo your default account be private, as opposed to defaulting to a public account," said Scoggin.
BuzzFeed News found President Biden’s Venmo account and his private connections using the app's built-in search tool and public friends feature.
U.S. PIRG says customers should set their accounts to private, and link it to a separate bank account or credit card so that additional funds can't be drafted.
"Linking to a credit card, for example, will better protect you if and when a scammer uses your account," said Scoggin.
All of these digital payment apps say they have processes in place that flag scams. They warn you to only send money to people you know and urge you to contact them if you've been scammed.
U.S PIRG suggests sending a $1 test payment to someone first, and verify the person received it before sending full payment.
We reached out to the Consumer Financial Protection Bureau, which sent us this link to help answer questions about unauthorized electronic fund transfers.