In recent years, there has been an increase in payment fraud in the U.S., especially through common online payment apps like Zelle and Venmo. Between 2022 and 2023, cases of payment fraud increased by up to 15%, according to AFP reports.
A survey by AARP revealed that one in five adults has been a victim of financial exploitation via these apps, leading to up to $5,000 in losses. Although Zelle and Venmo are generally safe for transactions, scammers continuously develop new tactics to scam victims.
If you use any of these peer-to-peer (P2P) payment platforms, learning more about Zelle or Venmo scams will help you better understand how to spot scams and avoid them. In this guide, we discuss the popular payment app scams and the steps to take if you fall victim to them.
Do Scammers Use Venmo or Zelle?
Yes, digital payment platforms like Zelle and Venmo are a hub for scammers. This is because of how easy and quick it is to access funds when you get paid via these platforms, compared to traditional banking methods. You only need minimal information, such as an email address, username, or phone number, to receive or send money through P2P payment platforms.
Once the money is transferred to the recipient, they receive it in real time and can quickly withdraw the amount. This makes it difficult for the victim to recover their money or locate the scammer after the attack.
Social engineering scams in particular rank highly in the scammers’ toolbox because they’re difficult to detect. They’re designed to trick vulnerable individuals and gain their trust fast.
What Is Social Engineering?
Social engineering, or human hacking, is a form of psychological manipulation that scammers use to exploit their victims and persuade them to give up their private information. Here’s how it works in detail:
| Process | Technique Used | Explanation |
| Preparation | Stalking | The scammer visits the victim’s online accounts, social pages, and other useful platforms to gather information about them |
| Assurance building | Phishing, pretexting | They initiate contact with the victim, posing as someone they can trust to build a connection |
| Persuasion | Baiting | The scammer tries to convince the victim to share useful personal information they can exploit |
| Exploitation | Scamming, hacking | The scammer launches their attack and stops contact with the victim |
Social engineering is an effective scam practice for most scammers because they leverage humans’ trusting and curious nature to fuel their deceitful tactics. They know that, in many cases, it’s easier to trick victims into sharing their confidential details or sending them money than to hack their passwords.
A prime example is when popular reality show producer Andy Cohen lost a significant amount of money to scammers impersonating his bank’s fraud department. Cohen divulged his private information to the scammers because they appeared to be people he trusted.
Scammers will continue to use social engineering techniques to perpetuate cybercrime. As long as Zelle or Venmo users remain uninformed about these tactics, many more will fall victim.
Popular Zelle or Venmo Scams To Be Aware Of
To stay safe, you need to educate yourself on the popular Zelle and Venmo scamming tactics out there. These are five trending scams in the cybercrime space:
- Impersonation scams
- Facebook Marketplace scams
- Accidental payment scams
- Cash flipping scams
- Suspicious link scams
Impersonation Scams
In a scam like this, criminals pretend to be a person or organization you know to get you to share your personal or financial information that they can later exploit.
To encourage you to take the action they want you to take, scammers pose as entities you can trust, including:
- Family members and acquaintances—The criminals tell you they need some money for a convincing emergency and that they’ll send it back once they have access to their money
- Government organizations—They lure you into providing your financial details to receive some fake government relief or tax refund. If you accept, they use this data to make unauthorized withdrawals from your account
- Charities—They ask you to donate money to a fake cause (like relief for natural disaster victims or charity events in honor of veterans). If you do, they steal the money and disappear
- Financial institutions—They pretend to be representatives from your bank, payment apps like Zelle and Venmo, or credit union. They request your details to upgrade your account or reverse a fraudulent transaction that occurred on your account
Online Marketplace Scams
These types of scams happen on online marketplaces like Facebook or Craigslist. The scammers put up fake or non-existent items for sale and pressure people to make deposits or pay for the items via a payment app (Zelle or Venmo). Once the interested buyer pays, the scammer blocks them or disappears.
If you’re the seller, scammers can request your email to send you money via Zelle. They’ll email you a fake receipt for the item you’re selling and claim to have paid for it. If you send them the package, they’ll disappear without paying for it.
Accidental Payment Scams
In these scams, crooks use a stolen credit card to “accidentally” transfer funds to your account. Then, they’ll send you an email asking you to urgently return the money via Zelle or Venmo, claiming it was an error.
If you send the money back to the scammer, once the real owner of the stolen credit card eventually cancels the transaction, you’ll end up with a gaping loss on your account.
Cash Flipping Scams
Cash flipping scams involve fraudsters pretending to be financial experts, like cryptocurrency investors or stock brokers, claiming to be able to double a small amount of money in a short time.
They show off fake certificates to prove their competence in financial matters so they can lure in people looking for quick cash. If you fall victim to this tactic and send them money, you’ll never receive the promised amount.
Suspicious Link Scams
You may receive an SMS or email from someone claiming to be your bank or online payment platform. In the email, they can ask you to input your financial details through a link they provide, supposedly so they can help you upgrade your account, recover lost funds, etc.
Clicking on this link is dangerous as it can install malware on your device, allowing scammers to take over your Zelle account.
What To Do if You Fall Victim to Venmo or Zelle Scams
If you fall prey to scammers on your Zelle or Venmo account, follow this procedure to protect yourself and try to recover your funds:
- Contact Zelle, Venmo, and your bank—Immediately contact the financial institutions involved in the transaction to alert them about the scam so they can begin their investigations. For Zelle fraud, you can contact your bank directly since Zelle partners with banks, but for Venmo, contact their fraud department to file a report
- Modify your passwords—Lock the scammer out of your accounts by swiftly changing the password on all your bank and payment app accounts. Use a strong 16-character password to make it difficult to crack
- File a police report—Contact your local police department to file a report of the scam case. You’ll need this file as evidence when you begin disputing the fraud claim with your bank
- Move your funds to a safer location—Storing large savings or cash reserves in payment apps or traditional savings accounts isn’t safe. If scammers breach your payment app account, it doesn’t take long before they drain your funds from the connected bank account, too. If you notice you’ve been a victim of a scam attack, immediately move your savings to a more secure savings account, like the one FortKnox provides
