Did someone “accidentally” send you money on Venmo? You may be scammed

Did someone “accidentally” send you money on Venmo, Zelle, or Cashapp? They may be trying to scam you. (Bloomberg/Getty Images)

I was still in the fuzzy newborn phase with my son when someone sent me $500. In between diaper changes and endless bouncing sessions on the yoga ball, I got a push notification on my phone.

“Anna sent you $500.00 – Antique Table – You now have $500.00 in your Venmo account.”

Free money! Like most new parents, I had a lot of ideas about budgeting a $500 windfall. (Venmo, a digital wallet app owned by Paypal, took a 1.9% seller transaction fee plus another 10 cents, so my $500 was actually $490.40.) But I didn’t even own an antique table , I wasn’t even selling. I was running on little sleep, but the sense of fraud was tingling. Anna had sent me the money by mistake—or had she? Wouldn’t you double check someone’s phone number before sending them that much money?

It may have been an honest mistake. I sure would hate to be out so much because I misspelled a digit. I looked for it and found one Better Business Bureau warning about this “money sent by mistake” scam. from 2020.

I looked up the Venmo FAQ on what to do. To my surprise, Venmo said I could “simply send the payment back to this user.” (Venmo has since updated its instructions: The page says to contact Venmo support if you receive money from someone you don’t know.)

How the scam works

Sorin Mihailovici, the editor-in-chief of Scam Detector, said that if I sent the money back, I might have found $500.

He explained: The scammer steals credit card numbers — which can be purchased in bulk on the dark web — and attaches them to accounts on digital wallet apps like Venmo, Cashapp and Zelle. Then they “accidentally” send money to hundreds or thousands of people at once, whose phone numbers were similarly obtained in some back alley of the Internet. A subsequent refund request goes to all targets. Some of these people will ignore it, but others will send the money back.

The software can automate the entire process, Mihailovici said, so even if only 1 percent of scam targets send money back to them, “it’s an incredible money-making machine with extremely, extremely little effort.”

The first victims whose credit card numbers were stolen will see the charges and contact their banks, who will likely reverse the charges. So they get their money back.

But maybe not.

In its support documentation for payments from strangers, Venmo notes that when you send money back, it will come from your Venmo balance, unless the amount you’re requesting is greater than your Venmo balance. Because the seller’s commission was deducted, my balance was $490.40, remember? So if I sent Anna the entire $500, according to Venmo, it would have been fully funded by my external payment method, AKA my credit card or bank account.

If the first transaction was then reversed, I’d have to take it up with my bank to try to get my money back — which only ends up being successful for less than 14% of Venmo fraud victims, said Steve McFarland , the president and CEO of the Better Business Bureau of Los Angeles and Silicon Valley.

Think of it this way: If someone handed you an envelope full of cash and said, “Hey, here’s the money I owe you for the antique table!” and then he walked away and a minute later he came back and said, “It’s okay, you’re not the right person,” you’d give them back the same stack of bills. But it doesn’t quite work that way with digital payments. A scammer sends you $500, but if the charge is reversed, that original $500 is returned. The money you sent “back” is another $500. It’s your $500.

So it would be like someone giving you this envelope, and then when they came back, you gave them a different set of bills from your wallet. Then a minute later, someone else came and said, “That’s my cash envelope, someone stole it from me,” and took it back.

Mihailovici said Venmo isn’t the only app where this scam takes place, but because it’s so popular, scammers can find the most targets there. And even the updated instructions from Venmo are contradictory in places, he said: On the “payment from a stranger” page, it tells you to contact support if you receive an unexpected payment. but on the “cancel payment” page, it says if you send money to someone by mistake, you should ask them to send it back to you.

Venmo declined to make anyone available for an interview for this story. A company spokesperson sent this statement via email: “The security and privacy of all Venmo customers and their information has always been the company’s top priority. When we become aware of fraud, we proactively work with law enforcement and industry partners and use our systems We encourage customers who suspect they are the target of fraud or have had an unauthorized transaction to contact Customer Service directly.”

What should you do if someone sends you money by mistake?

“Absolutely do not refund them,” McFarland said.

I decided to leave the money in my Venmo balance. Anna could have worked it out with Venmo or her bank if she had accidentally sent it.

A few days later, I was bombarded with unsolicited requests to send back the $500. Again I did nothing. I admit I felt my heartstrings tug a little: What if Anna had actually sent the money by mistake and really needed it back? But I didn’t feel bad enough to possibly lose $500.

I left the money in my Venmo account and a week after sending it, a refund was made for $500 and they took the money from my Venmo balance . Venmo gave me a credit for the seller transaction fee, so I never lost money.

I guess I’ll never know if Anna was a fraud or someone who made an honest mistake. If it’s the latter, I hope she made it and is enjoying her table.

This particular scam is partly due to a problem with Venmo’s user interface: There’s no way to manually decline, decline, or cancel a payment. So if you receive a payment you didn’t expect from a stranger, the safest thing to do is to let it go into your Venmo account. But if it’s from someone you know — say they accidentally sent you their share of the rent instead of their roommate with the same first name — the right thing to do is send it back to them.

“Accidentally sent money” is not the Better Business Bureau’s most complained about scam, McFarland said. Most of the reports he sees are buyer/seller disputes: The buyer uses a digital wallet app to make a payment, and the seller doesn’t deliver the product as promised. It used to be that seniors were the most common victims of fraud, he said, but in the past two to three years, that has changed: Now it’s millennials and people just above and below that cohort who are most likely to fall victim to scams.

Why; “They’re online,” McFarland said.

And millennials “don’t do as much research” before making an online purchase from somewhere like Instagram, TikTok or Facebook Marketplace, McFarland said. “They said ‘yes’ very quickly, as they’re hovering over their phone, talking to their friends, doing this and doing that and multiple apps at the same time, and they don’t have time to research certain markets and offers and hope that things show up in the their door. And they are deceived.”

What if you send money to the wrong person?

What if you are Anna in this scenario? You can try contacting customer support for the app you used or dispute the payment with your bank or credit card and you might be successful. Or maybe not.

“There’s almost nothing you can do,” said Mihailovic. He compared it to leaving money on the table at a coffee shop and then returning later in the day. That money is probably gone. In the event of an incorrect payment, you can certainly take Venmo’s advice and claim it back. You’ll just have to hope the other person is kind and understanding — and didn’t read this article.

This story originally appeared in the Los Angeles Times.

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