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Venmo, Cash App, PayPal, Zelle and other payment apps may be convenient ways to send cash with a few taps of your smartphone, but they’re a breeding grounds for theft, Manhattan District Attorney Alvin Bragg tells CNN.
Culprits range from savvy swindlers, who trick their way into victims’ locked cell phones, to violent offenders who either drug their targets and then take advantage or bark out commands while threatening physical harm, Bragg said in an interview.
The issue has gotten so out of hand in New York that Bragg has sent a letter to the popular apps demanding that they put in more security measures, including lower transfer limits, additional password security, additional wait times for large transactions and increased monitoring for unusual activity.
In the letter, Bragg cited a 2022 letter from Sen. Elizabeth Warren’s office that was sent to the banking industry where they said fraud claims had tripled between 2020 and 2022, costing consumers hundreds of millions of dollars. The investigation centered around Zelle and indicated not only was fraud rampant, but was getting worse. And banks have often been unwilling to make customers whole, even if they were victims of fraud.
As a solution, Bragg asked for more safety measures, such as lowering the limit of daily transfers, requiring wait times on larger transfers, and for a confirmation when suspicious transfers occur. Even something as small as canceling a transaction would help, Bragg said
“A failure to take proactive steps in the name of your consumers will lead to further illegal behavior and countless unsuspecting victims,” Bragg wrote in the letter.
Venmo and its parent company PayPal said they take safety and security seriously.
“In addition to proactively leveraging sophisticated fraud detection tools, manual investigations, and partnering closely with law enforcement agencies to protect our customers against common scams, we have several options in place to enable enhanced layers of security and protection directly within our apps,” a PayPal spokesperson said in a statement.
In a statement, Zelle said it was “aware of isolated criminal incidents described in the Manhattan District Attorney’s letter.”
“Providing a safe and reliable service to consumers is the top priority of Early Warning Services, LLC, the network operator of Zelle, and our 2,100 participating banks and credit unions,” the company said. “As a result of our continued efforts to build on Zelle’s strong foundation of security, less than one tenth of one percent of transactions are reported as fraud or scams, and that percentage keeps getting smaller.”