HOUSTON – Peer-to-peer payment apps make sending money to friends easy but if you’re not careful, a simple mistake could cause you to lose your hard-earned money.
Despite the growing popularity of apps like Zelle, Venmo, and Cash App, most users never read the fine print or terms of service. If you did, you would discover:
- Most peer-to-peer payments are instantaneous and irreversible. Scammers know this. That is why you should only use the apps to send money to someone you actually know. If you accidentally pay the wrong person, most of the payment apps will not help get your money back.
- While your credit card offers fraud protection, allowing you to dispute charges, most payment apps do not. You have very few protections if any.
- A traditional Paypal account processes funds more like a credit card, so it routinely offers protection. But the others-- Zelle, Venmo, and Cash-- do not. They are generally linked straight to your bank account.
If you are scammed, you can try reaching out to your bank as soon as you realize something’s wrong, but banks cannot or will not always help.
Consumer Reports has more on this subject.
Read this story to find out how scammers can wipe out your bank account through these peer to peer payment apps.