For time-pressed consumers, the burgeoning market for peer-to-peer payments is a godsend. But where there’s a critical mass of users and easy money to be made, scammers will never be far behind.
With that in mind, the most effective antidote to the growing range of Venmo scams circulating online is to get clued in to how they work.
What is Venmo?
Venmo is one of a new breed of mobile payment applications that allow users to seamlessly send and receive money via their devices. Founded back in 2009 as an SMS-based tool, it’s now owned by PayPal. Consumers are attracted by its ease of use: Venmo allows users to send and receive funds quickly, easily, and free of charge via linked bank accounts or cards.
However, this speed and simplicity also make it a prime target for scammers. Unlike card payments, consumers aren’t usually protected if they are tricked into paying a fraudster via Venmo. Once the money has left your account, it’s gone. This makes it particularly important to recognize when someone is trying to scam you.
The top seven Venmo scams
Stay safer online by familiarizing yourself with these common Venmo scams:
1) Accidental payment scams
A stranger sends a payment to you, then gets in touch to say that it was a mistake and asks for a refund via a new payment. However, the original payment was most likely made from a stolen card. When Venmo is alerted to the fraud by the real cardholder, they’ll take the original amount from your account, leaving you out of pocket.
The scam is so prevalent that the attorney general in the US state of Michigan considered it necessary to warn local residents about falling for it.
2) Phishing scams
Sometimes scammers use the Venmo brand in a bid to part users with their personal information or logins. These classic phishing-type threats can arrive via email or text message and feature realistic-seeming Venmo branding in order to trick you.
A common version will claim that there’s something wrong with your account, requiring you to log in to rectify it. However, the link in the message will take you to a fake Venmo login page designed to harvest your passwords so that the scammer can hijack your account and drain it of funds. If you have multifactor authentication (MFA) switched on, the scammer may send a follow-up text with a link to the phishing site. They may even call, pretending to be a Venmo employee, and request the one-time MFA passcode.
3) In-person phone scams
Your phone is a valuable asset, enabling you to access personal information and finances at the touch of a button. Scammers know this and may try to con you into handing them your device so they can rapidly transfer funds from your Venmo account to theirs.
In one much-publicized case, former Miss New York Briana Siaca, was tricked by two teenagers into donating to their fundraising effort. After they offered to enter their account details directly into her phone, she handed it over, only to find they had sent themselves $2,000. Although that particular scam was carried out on Zelle, the same trick may be possible on Venmo.
4) Fake charity or fundraiser scams
Scammers are always looking to take advantage of the goodwill of their victims. Sometimes they’ll do this by impersonating a charity or fundraising effort, using phishing messages in emails, texts, or social media to reach their victims, as well as in-person attacks like the one described above. Alternatively, they could create a completely fictitious charity.
Scammers (will) often use a notable event like a recent natural disaster in order to get
a victims´ attention. This happened in 2022 when scammers set up a fake charity to collect funds intended to support a Long Island family affected by a tragic house fire.
5) Overpayment scams
Venmo scams on Facebook Marketplace and other classifieds platforms are also popular. For example, a buyer might overpay you for an item with a stolen card and then ask for a refund of the difference. As per example 1), when the original cardholder finds out, they will demand the payment be cancelled or reversed, leaving you out of pocket.
6) Rental deposit scams
Venmo scams on Facebook Marketplace can take many forms. Another popular one involves fake listings for big-ticket items, event tickets, and even rentals. In the case of the latter, the scammer may scrape photos and information on properties from the web to make their listing look legitimate. They’ll advertise the rental below the market rate to attract your attention. However, if you make a deposit without asking to view the property first, they’ll disappear into thin air, along with your money.
7) Fake customer support scams
Venmo scams increasingly take place over the phone via so-called “vishing” (voice-based phishing) techniques. One of the most popular involves fraudsters posing as Venmo customer support agents. They will create a pretense to ask you for sensitive information such as MFA codes (used to hijack your Venmo account) or sensitive personal and financial information (for use in follow-on identity fraud).
How to protect yourself from Venmo scams
Fortunately, there’s plenty you can do to reduce the chances of losing money to scammers. To cover the basics of general digital security, it pays to:
- Use strong, unique passwords (stored in a password manager), and never share them online or over the phone.
- Switch on MFA for added account security.
- Regularly review your Venmo/bank account details and recent transactions to monitor for anything suspicious.
- Use an identity protection service from a trusted provider, one which will help protect your personal, credit, and financial information.
- Use reliable online protection software like ESET HOME Security Ultimate to help detect scams, block fake websites, protect your identity, and defend against malware thanks to powerful features such as Anti-phishing, Safe Banking, and Safe Browsing.
GET ESET HOME SECURITY ULTIMATE
Unfortunately, best practices won’t necessarily protect you from all the scams listed above because of the social engineering involved. Given that only around 14% of victims get their money back, it’s important to be able to spot the warning signs of potential fraud.
Spotting the red flags
- Be cautious when receiving unsolicited payments from strangers or overpayment for items you’ve listed for sale online.
- Avoid interactions with users who pressure you to act immediately. This is a classic social engineering tactic designed to rush you into making the wrong decision.
- Never provide personal or financial information (including logins) in response to suspicious/unsolicited emails, texts, or phone calls, even if they purport to come from Venmo or a legitimate authority.
- Never hand your device to a stranger.
Best practices for transactions
- Transact only with trusted individuals.
- Double-check the recipient’s username before sending money.
- Limit Venmo use to small, casual transactions rather than large purchases.
- Never pay a deposit for a property rental without viewing it first and confirming the renter’s legitimacy.
What to do if you fall victim to a Venmo scam
Venmo scams are so prevalent and the fraudsters behind them so persistent that, even with the best intentions, some of us will get caught out. If that happens, don’t panic and work through the following steps:
In the immediate aftermath:
- Report any unauthorized transactions to Venmo support.
- Change your Venmo password and secure your financial accounts.
- Monitor bank statements and credit reports for unusual activity.
- Report any fake/suspicious communications to Venmo.
Contacting authorities:
- File a complaint with the Federal Trade Commission (FTC).
- Report fraud to local law enforcement if necessary.
Terms and conditions
Venmo offers various security mechanisms to its customers, such as data encryption, account monitoring, MFA, and account PIN codes. However, it offers only limited protection against fraud. That’s why it makes sense to understand the conditions attached to its purchase protection program.
Always exercise caution and honesty when using Venmo. Reporting suspicious activity isn’t just important for your own protection; it also helps to safeguard the entire community.
Expert tips and insights
“Mobile banking is equally, if not more, secure than classical internet banking. The reason is that the user does not have to manually input any card, account information, or credentials, reducing the risk of errors and/or data interception. Contactless payments through mobile or smartwatches are among the safest, as the owner is always prompted to confirm the payment with a PIN code or biometric data. Of course, nothing is bulletproof, and even mobile devices can be attacked by banking malware or through known and unknown vulnerabilities. Therefore, they need to be kept updated and, if possible, protected by security software.”
- Lukáš Štefanko, ESET Senior Malware Researcher
Frequently Asked Questions (FAQs)
- What are the most common Venmo scams?
Accidental payments, phishing, fake customer support, and fake charity scams are all commonplace. Also, watch out for non-existent listings on Facebook Marketplace (including rentals) and overpayment from suspicious buyers.
- How do I report a Venmo scam?
You can find details at Venmo’s Help Center
- Does Venmo offer protection against scams?
Only in limited circumstances. Find out here.
- What should I do if I receive an unexpected payment on Venmo?
Contact Venmo to report the payment. Don’t refund the original sender as it could be an “accidental payment” scam.
- Can Venmo transactions be reversed if I’ve been scammed?
In most cases, no. However, you can try to contact the firm to dispute the transaction.
- How can I verify if a fundraising request on Venmo is legitimate?
Take time out to do background research on it. You can also find a list of legitimate charities here.
- Are business accounts on Venmo safer?
Not necessarily. Venmo offers limited protection for business accounts, making it essential that you stay alert to the possibility of fraud.
- What steps should I take if I fall victim to a Venmo scam?
Contact Venmo support, change your Venmo password, monitor your statements/balance for unusual activity, and consider reporting to the FTC/local law enforcement.
