The Emergence of Cash App Scams

  • By David Lukic
  • Oct 14, 2020

Peer-to-peer payment apps are all the rage these days. People use them for swapping money back and forth between friends and family and sometimes for commercial use; this is where the trouble begins. Unfortunately, criminals have discovered unique ways to use these platforms to deceive victims and steal money from them, which started the emergence of Cash App Scams. 

Some of the more popular platforms are Cash App, Venmo, Zelle, Apple Pay, Google Pay, and Facebook Payments. Although each works slightly different, they all have policies against being used for commercial sales. 

cash app scams

Cash App Fraud Prevention: How Does it Happen in The First Place?

One unfortunate victim Peppe Holmsten, put an ad on Craigslist to sell a fancy camera. He received a reply from a scammer named Gabriel. The man offered Peppe $1,100 and paid it via Venmo. He then met Peppe in person to pick up the goods. A couple of days later, Venmo emailed Peppe telling him that the funds had been reversed because the transaction violated their “no commercial use” policy. He tried to contact Gabriel about the incident, but he was long gone enjoying his free camera. 

Because these peer-to-peer cash apps work between individuals, they do not guarantee or protect against any transactions. 

Another user in Florida received a message from Venmo after losing $1,600 in a similar scam. In other cases, victims have Venmo(ed) the money to scammers for goods they never receive, and then they can’t reach the scammer after the money's gone, it is crucial to understand the examples of Cash App scams for Cash App fraud prevention. 

cash app fraud

More Alarming Cash App Scams to Know For Cash App Fraud Protection

This past summer Chrysanthi Rausch was scammed in a terrifying scheme. She received a phone call in the middle of the day, and the woman claimed to be from her bank. She said she was calling about a fraud alert and needed to send her a text to verify her account. She received the text, read the 6-digit code, and that was it. 

The scammers created a fake Zelle account in her name using the code from her bank, and they were able to access both her savings and checking accounts. They stole $1,600 before she even knew what hit her. 

The payment app Zelle is tied in with dozens of banks, and therefore all the scammers needed was her validation code to hack into her bank account. Zelle boasted recently about transferring more than $119 billion last year; how much of that was stolen funds? Not only our Cash App software is in danger, but also prone to identity theft.

Some of the hackers even use spoofed phone calls to trick victims into thinking they are getting legitimate phone calls from their banks. This new type of Cash App scam is really scary stuff, and it is very important for all cash app consumers to know about these problems for Cash App fraud prevention. 

The Methods Used for Cash App Scams

Experts advise users of any cash payment apps to read the warnings and use them only as directed. 

There are warnings on both the Venmo and Zelle websites warning users to never send money to strangers using the apps. Scammers often pay using one of these apps, and then as soon as they receive the goods, they cancel the transaction before the recipient has time to transfer it out of their account and into their bank. 

Cash App Fraud Protection

Some other tips for keeping your money safe when using these types of cash transfer apps are: 

  • Always secure the apps via a PIN code or some other security measure in case your phone gets stolen.

  • Read the user agreement to make sure you aren’t violating any policies.

  • Turn on two-factor authentication when available.

  • Only use the app with people you know well.

  • Be careful of vendors who require you to use payment apps like Zelle, Venmo, and Cash App. 

  • Always be on the lookout for scams, data breaches and things that sound good but also a little fishy.
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