ARLINGTON, VA (CLARKSVILLENOW) – Digital wallet apps like Venmo, Cashapp and Paypal can be very convenient for small businesses and consumers alike, but they also offer new avenues for scammers to take advantage of people. One such scam has been gaining popularity as of late, and involves the victim receiving a large payment by ‘accident.’

How does the scam work?

The potential victim receives a message through their digital wallet app reading something like “Sorry! Can you send that back?”  They will then notice several hundred dollars in their balance sent by an unknown user. Most people would think to return the money. It is, after all, easy enough to type in the wrong payment information.

It is possible however, the received money is itself stolen. Scammers will use stolen credit cards and bank information to send money through Venmo and similar apps to random people. They will then switch the payment information to their own card so that, when the victim ‘returns’ the money, it goes to the scammer’s account instead. Once the money is reported as stolen by the initial victim, the amount is subtracted from the secondary victim’s account, leaving them out that money.

Due to the nature and frequency of this scam, it is extremely difficult for the secondary victim to recover their stolen money as digital wallet vendors such as Paypal, Venmo and Cashapp are unlikely to reimburse them. This is one of many scams using digital wallet apps.

How to protect yourself from digital wallet scams

Digital wallet apps are extremely convenient, and they can be reasonably safe so long as users take adequate precautions. The Better Business Bureau has released the following advice for users:

  • Only send money to friends: One of the easiest way to protect yourself from scams is to only deal with people you know. If you are not sure who a user is, do not interact with them in you app.
  • If someone sends you money by accident, ask them to cancel the transfer: When sending money through an app, the payer can usually request a cancellation from the vendor. If they refuse to do so, then they are likely using a scam.
  • Use security features: Check account settings for additional security features and make sure to use them. These can include multi-factor authentication, fingerprint recognition, or security questions. Some apps offer transaction insurance for fee of a few dollars.
  • Link your app to a credit card: Many credit card companies insure purchases in ways that a debit card or bank account do not. As such, they are often a safer option.

If you have fallen victim to a scam such as this, contact your bank immediately and change your passwords. Scams can also be reported to the BBB here,which can help prevent future victims.