Attorney General William Tong

State Officials Issue Warning About Peer-to-Peer Apps for Money Transfers

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The attorney general is urging Connecticut residents to be vigilant when using “peer-to-peer” apps to avoid losing money, giving out valuable personal information or being victimized by scammers.

Attorney General William Tong said that the apps can be used safely, but it is important to make sure you understand the app’s terms of use and be careful about who you are sending funds to.

“Sadly, there are a lot of bad actors out there and when it comes to your money and your privacy you can never be too careful,” Tong said in a statement. “If you are using P2P apps like CashApp or Venmo to make transactions, check your account frequently for signs of fraud. Make sure you know the terms of the contract and carefully review all the transactions you make. A little vigilance can save you a lot of money and hassle down the road.” 

Department of Consumer Protection Commissioner Michelle Seagull said consumers should use strong passwords and two-factor authentication if it’s available to better protect yourself from hackers.

“Never send money to somebody you don’t know or haven’t met, and remember that no utility company or government entity will ask you to pay your bills through a P2P app,” Seagull said in a statement.

The Office of the Attorney General said it has received several complaints about P2P apps.

In one instance, a man complained that one locked his account with $3,000 in it, which he needs to pay bills. In another instance, a man complained that he sent $2,250 through an app to a fake account that scammers had disguised as his bank, according to the office of the attorney general.

Another Connecticut woman used an app to pay a breeder for a puppy. When she never received the puppy, she was unable to cancel her transaction within the app and get her money back. Other app users have complained that unauthorized people hacked their accounts and stole thousands of dollars. One woman complained of a scam where she was contacted on her cell phone and told that her electricity would be disconnected in 30 minutes unless she could pay $150 to one of the apps, according to Tong’s office.

NBC Connecticut reached out to Cash App after a viewer contacted us to report an issue with a payment.

More people than ever are picking up their cell phones to make payments. And with the coronavirus crisis, more money is changing hands at a social distance through money transfer apps. But a Hartford man has a warning for after hundreds of his hard-earned dollars didn’t make it into the right hands.

In a statement, a Cash App spokesperson said, “Preventing fraud is critically important to Cash App. We continue to invest in and bolster fraud-fighting resources by both increasing staffing and adopting new technology. We are constantly improving systems and controls to help prevent, detect, and report bad activity on the platform.”

A statement on the Venmo website says, “Venmo is designed for payments between friends and people who trust each other. Avoid payments to people you don't know, especially if it involves a sale for goods and services (like event tickets and Craigslist items). These payments are potentially high risk, and you could lose your money without getting what you paid for. Venmo does not offer buyer or seller protection. Business usage of Venmo requires an application and explicit authorization.”

Paypal urges anyone who notices a transaction that you didn’t authorize to let them know right away in the Resolution Center.

The attorney general said never give out information over the phone to someone purporting to be from the company that issued you the account. There are scammers that pose as customer service representatives.

When sending money, enter addresses carefully. It is easy to send money to type the wrong account address, and then very difficult, if not impossible, to retrieve it.

The attorney general said there are a vast number of reports of hacked prepaid accounts and you should conduct regular reviews to screen for suspicious activity.

Officials urged that people review the terms of use of the P2P account carefully. Don’t assume that your rights to dispute a transaction using a P2P Applications are identical to those for your credit card account. They might not be.

They urged people to understand the difference between authorized and unauthorized transactions and follow all the contract terms, especially registering your account.

They warned that consumers might waive their rights to company investigation and corrections if the account is not registered and/or the suspect transaction is not reported to the P2P Issuer in a timely manner.

To file a complaint with the Office of the Attorney General visit https://www.dir.ct.gov/ag/complaint.

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