Venmo Scams [video]
/transcript
Here are a couple Venmo scams that I hadn't heard of that I thought were worth sharing.
The Overpayment Scam
Someone pays you and they say, I'm so sorry, it was an accident. Can you please give me my money back? Well, you pay them. Turns out they paid you with a stolen credit card. So Venmo figures this out a few days later, cancels the payment, but the scammer gets to keep your real money. So, making sure that you don't transact with anyone that you don't know and don't trust on Venmo is a good way to protect against that.
The Stranger in the Street
The other is the 'stranger in the street' scenario, and I've heard of this happening, but essentially someone pretending that their phone is dead and they need to call someone. Can they please just borrow your phone quickly? Well, you unlock the phone for them, and just within seconds, they can transfer money from your Venmo to their bank account. So a few ways you can protect against this. One, not giving someone your phone ever. If that happens, you can offer to dial the number and call for them, but not ever giving anyone the phone under any circumstances.
How to set up your Venmo Security
The other could be having security protections on your Venmo account. I also did not have this set up. I just figured this out and it was super easy to do. You go to settings, you can add biometric login or a passcode or both, so that Venmo cannot be opened without that additional layer of security. So even if they have your open phone, they can't do anything within there.
Should you link a credit card to your Venmo account?
The other thing I've read about is considering adding a credit card instead of a bank account to Venmo. The reason behind that is just that credit cards have a lot more fraud protection than a bank account or debit card. When that money's gone, it's gone, versus a credit card. You can say that that wasn't a legitimate charge, and they can go ahead and cancel it.
Do what works for you. I mean, for me, I figured. I noticed that the credit cards, there is an additional fee when you use that through Venmo. You also can't transfer money from Venmo to the credit card.
So personally, I've just decided to unlink all accounts with my Venmo. I don't use it that often. When I do use it, I will go ahead and link my bank account, make the payment, and unlink it. Likewise, when I need to transfer money to my checking, I will do that but I just don't use it enough that, for me, that's a viable solution, but I would love to hear if anyone else has any other thoughts on that
Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.
Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.