Venmo revolutionized online money transfers, but scammers are using a loophole in the company's user agreement to con people out of thousands of dollars.
In the digital age, we have become accustomed to the idea that things happen instantly. This expectation can cause people to assume that the green checkmark next to their Venmo payment indicates that money has been automatically deposited into their account.
This is not always the case. Instead, it can take days to transfer. Con artists use this time period to terminate their end of the transaction. Even if goods have been exchanged, victims of this scam are cheated out of their money. Scammer's ability to do this hinges on one line in the Venmo user agreement that many are not aware of: "Business, commercial, or merchant transactions may not be conducted using personal accounts."
For example, you might post your concert tickets on Craigslist and receive an offer from someone named "Steve," who agrees to pay you via Venmo. After your account confirms that a bank transfer has been made, you send the tickets. What you don't realize is that you've been scammed!
The next day, you get an email from Venmo with a warning that the funds have been reversed, or you receive a notification that your account has been frozen due to a breach of the user agreement. In the end, you lose the money you should have been paid, and "Steve," a con artist who took advantage of Venmo's fine print, ends up with free tickets.
The best practice to protect yourself from these scams is to limit Venmo transactions only to people you actually know. It's a great way to pay your roommate rent, but maybe not to sell your Beyoncé tickets.