HOUSTON – Sending and receiving money has never been easier. With companies like Venmo, Zelle, Cash App and Paypal, you can pay for just about anything online with the click of a few buttons. But how safe is your money when you use these apps?
KPRC 2 Investigates has what you need to know before you send another payment:
Last year, 18 million Americans were scammed through mobile payment apps or digital wallets. They lost a collective $130 million. We’ve done several stories warning people about potential scams using payment apps. Here are just a few:
- Thieves stole $5,800 from Sakala Lewis through her Cash App.
- Karen Miller thought she was talking with a prospective employer when her bank account was drained through Cash App.
- Wanda Schaudel and her son were scammed with the virtual kidnapping scam.
In all of these cases, the people targeted were aware of scams and thought they were being careful. It can happen to anyone. Here’s what you can do to protect yourself:
1. Link a credit card to payment apps, not bank account
Unlike your credit or debit card, mobile payment apps don’t have as much fraud protection. So when you’re a victim of fraud, it is nearly impossible to get your money back. It’s why experts recommend linking your payment app to a credit card, not a bank account.
Credit cards do have more fraud protections. Cash App, Paypal and Zelle all allow you to link accounts to credit cards but when you do, they tack a 3% processing fee onto every transaction. Three percent on a $25 payment is only 75 cents. That’s not a lot extra to protect yourself.
2. Set up passcode to get into phone
Hank Molenaar was tricked into using Zelle to send thousands of dollars to scammers pretending to be with his bank. And even though Zelle is owned by some of the country’s largest and most reputable banks, customers scammed out of money through Zelle almost never get their money back.
It’s why you have to protect yourself. You can lower your risk by setting up a passcode to get into your phone. Fingerprint or facial recognition is even better.
To protect yourself even further, you can set up a two-step factor or multi-authentication on all of your payment apps.
3. Sign up for payment notifications for all apps
And set up payment notifications: This way, if someone does get into your account and sends money, you’ll know immediately.
In almost every instance of payment app fraud, we’ve investigated the victim was tricked into sending money or unknowingly allowing the thief access to their app where they could take the money out. If this happens to you, you should immediately take screenshots of the transactions and contact your bank and the payment quickly to alert them. In some cases, they have been able to stop the transfer.
RELATED: What you should always check before downloading any apps to your device.
