Digital payment apps that allow you to pay for things with a touch of a button on your phone have became even more popular during the pandemic. But both fraud and consumer protection experts tell News5 we're also seeing more complaints about them and it's something we should be aware of.
Fraudsters want you to pay them on these digital platforms because in many cases right after you pay they can drain the money immediately and it's gone. One of the reasons fraudsters have been looking to utilize these platforms in their schemes is because there are so many new and unsuspecting users.
"So as we went through the pandemic we realized for safety reasons touchless payment was a great option. So people who wouldn't even consider cash app platforms were using these," said CSU Global's "Dr. Fraud" J. Michael Skiba.
The U.S. Public Interest Group recently released a report examining these digital payment app complaints. It shows more than 5200 complaints from mid-2020 to mid-2021. In April of this year alone there were 970. That's almost double the previous complaint peak in July of 2020.
The most common issues are problems managing accounts, problems with fraud or scams, or problems with transactions.
"People are complaining, not just once they're complaining for weeks or months at a time and they're getting no result," said Senior Director of Federal Consumer Programs at U.S PIRG Ed Mierzwinski.
Fraud experts say these digital payment apps were never meant for paying people you don't know.
"Let's say someone from an office makes a Starbucks run and comes back to the office and people hand out their $2 or $5, this is a virtual way to do that. It's a virtual way to share money with friends and family. That's really what it was designed for. It's not really designed for a transaction of goods or services," said Skiba.
"A big problem with the scammers and the Apps is that when you initiate the transaction and send the money to the bad guy it's not an unauthorized charge under the act Congress should fix that,"said Mierzwinski.
Security experts for the major payment apps are providing these warnings:
- You should only send money to people you know and trust
- Watch out and question any unexpected requests
- Set your privacy settings to the most private (which isn't the default)
- Double check usernames before sending any money
"These platforms are continuing to grow at an incredible rate and consumers should really be wary and forewarned and really put up their guard anytime they're asked to used this platform outside of friends and family," said Skiba.
One of the most common ways fraudsters will use digital payment apps as part of their schemes is to send phishing emails or text messages posing as these companies. They're hoping you will give up sensitive information or even credentials to access your accounts.
To report complaints about a digital payment app you are using visit:
https://www.consumerfinance.gov/
To report scams and fraud visit:
https://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftc
