Nessel issues consumer alert after nationwide reports of Venmo scam

MICHIGAN (WNEM) – Michigan Attorney General (AG) Dana Nessel is issuing a renewed consumer alert on payment app scams following reports that scammers are targeting Venmo users nationwide.

The scammer “accidentally” sends money to consumers through the peer-to-peer (P2P) app – such as Venmo – and then demands the money back. The Attorney General advises consumers never to send the money back and to contact the P2P service about the error.

The Attorney General’s Office said scammers often use stolen funds, which P2P services eventually flag as fraudulent. A common variation of this tactic is for a scammer to use a stolen credit card number to deposit the funds into the consumer’s P2P account. However, the actual holder of the credit card will eventually be successful in reversing this payment as a fraudulent charge.

If an unsuspecting consumer returns the “accidental” deposit to the scammer, the scammer will be charged by their credit card company and any funds transferred will be deducted from the unsuspecting consumer’s P2P balance, according to the Attorney General’s Office.

P2P fraud can take many forms, including:

• Fraudsters impersonate a consumer’s bank to alert them to “suspicious activity” on their account and instruct them to send money to themselves or to “the bank’s address” to reverse a transaction or confirm that the account is not frozen.
• Fraudsters contact consumers, pretending to be representatives of a fraud prevention department or merchant, and ask them to verify information such as bank account, username and password, credit or debit card details, or social security numbers.
• Scammers pose as legitimate companies and demand a P2P payment for a product or service.
• Fraudsters link a stolen credit card to a payment app and then seek out people selling expensive items – such as computers, tablets or cars – online and offer to pay for the product through the app. Once the seller accepts payment and ships the item, they soon discover that the payment sent is not to a legitimate buyer and the money collected is deducted from their account. The seller is then left with no item or money.
• Fraudsters send fake emails warning that an account will soon be blocked and the account holder must enter their password on a fake website.

The Attorney General’s Office reminds consumers to never share their personal information, treat P2P payments like cash, and not pay for products until they receive them.

Victims of fraud related to P2P payment apps can file a complaint with the Federal Trade Commission.

You may file a complaint with the Attorney General or obtain more information by calling 517-335-7599 or completing the online complaint form.

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