In the digital age, convenience comes at a cost. For users of popular mobile payment apps like Venmo and Cash App, that cost has become distressingly personal.
The rising tide of mobile app fraud is more than a series of isolated incidents, according to Manhattan District Attorney Alvin Bragg; it's a systemic failure in the financial tech (fintech) industry. In a society where our smartphones have become extensions of our financial identities, security gaps in apps like Venmo and Cash App expose users to sophisticated scams that are outpacing current protective measures.
Victims, betrayed by the tools they relied on for daily transactions, are now facing drained bank accounts and shattered trust. Kimberly, a mother from Kansas, recounted to Newsweek how her daughter's Venmo account was systematically emptied in a string of digital thefts. Another victim told Newsweek they were scammed hundreds of dollars through Cash App, saying they were left astray by the company after calling on them for help.
Kimberly's story, which ended up costing nearly $7,000, began with her daughter's trip to Montana. Using her Venmo debit card, Kimberly's daughter enjoyed a bachelorette weekend, swiping her card as she normally would, oblivious to the impending financial nightmare. Days later, back in Kansas, the daughter discovered that her Commerce Checking account had been raided, funding a spree of fraudulent charges on her Venmo card, totaling nearly $7,000.
"Her checking account was completely depleted," Kimberly shared with Newsweek.
Despite reaching out to Venmo and initially being promised a refund, she was left in disbelief when told nothing could be done, as the company couldn't trust that she hadn't made the charges herself.
The situation took multiple calls and an attorney's intervention, and still reached a dead-end where no refunds were given.
Similarly, Kimberly's own brush with fraud occurred after a trip to Las Vegas. She found her Venmo account pending a suspicious $1,500 transfer to an unknown foreign bank account. "I was ultimately accused of being careless with my phone or my iPad (I did not take an iPad) and allowing access to my account," Kimberly said to Newsweek. "Not possible as I carry my phone on a crossbody strap at all times."
"After asking many questions, I was told that had I not caught the charge while pending," she said, adding that "Venmo could care less that their app allows this kind of thing to happen."
The revelation that the money would be irrecoverable because she did not intercept the transaction in time led Kimberly to a firm decision—to sever ties with the app permanently.
A different victim, who preferred to remain anonymous, shared a tale with Newsweek that involved deception on Cash App, where they were duped by a fraudster posing as a personal chef requiring a deposit. The scam, involving a cloned social media profile of a legitimate chef, resulted in a loss of $450.
Appeals to Cash App for intervention fell on deaf ears, they said, leaving the victim without recourse or refund.
These issues are symptomatic of a larger problem that DA Bragg is tackling head-on, Newsweek previously reported. In his communication with the fintech giants sent earlier this week, he called for the urgent need for enhanced security measures. The current state of affairs, where smartphones are the new treasure troves for digital robbers, demands a proactive response from the companies, according to Bragg.
His letters to Venmo, Cash App, and Zelle outlined a litany of similar incidents across the country, which suggests a growing and increasingly sophisticated problem. The District Attorney urged for stricter security measures, including multi-factor authentication, and lower default limits on transfers—measures that he said could provide barriers against such fraud.
The companies have acknowledged the issue, telling Newsweek that they are committed to safety and have ongoing investments in security. However, for victims like Kimberly and the anonymous Cash App user, assurances offer little solace against their current losses and eroded trust.
Have you fallen victim to these increasingly sophisticated scams? We would like to hear from you. Contact us at personalfinance@newsweek.com to tell us your story.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more
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