Cash-sharing apps like Venmo and PayPal have become go-to tools for sending and receiving money, but their convenience comes with a catch—they’re also a goldmine for scammers. Even after the holiday shopping rush, fraudsters are ramping up efforts to siphon cash from unsuspecting users, exploiting these popular platforms in increasingly sophisticated ways.
How Scammers Strike
The U.S. Federal Trade Commission (FTC) warns that online data breaches fuel this fraud wave. Once hackers snag usernames and passwords from a breach, they buy them up and test them on cash app accounts where you might stash funds. Personal finance expert Jenny Groberg, CEO of BookSmarts Accounting and Bookkeeping, told Scripps News that scammers often lean on tech to crack your defenses. “The technology just keeps running through codes in minutes,” she said. “It can take your login or ID and try endless password combinations—chances are high it’ll break through.”
Scammers don’t stop there. If fraud is flagged, apps may email you to reset your password—but fraudsters might call from untraceable numbers first, tricking you into handing over the reset code. It’s a classic move in a growing playbook. The FBI’s 2023 Internet Crime Report reveals online fraud reports have nearly doubled since 2019, with losses skyrocketing to $12.5 billion last year alone. Tech support impersonation scams, in particular, surged 175% in 2023.
Real-World Risks
This isn’t a new game, but it’s hitting harder. From phishing texts posing as USPS deliveries to bank scams wiping out life savings—like one woman’s $10,000 loss—these threats are all too real. Even high-profile breaches, like the U.S. Treasury’s run-in with China-backed hackers, show how widespread the danger is.
How to Fight Back
So, how do you keep your money safe? The FTC suggests enabling two-step authentication (2FA) on your cash apps. With 2FA, resetting your login requires a unique code sent only to you—locking out anyone without it. PayPal and Venmo stress a golden rule: never share that code, no matter who asks, even if they claim to be from the company. They also caution against trusting unsolicited messages pretending to offer “helpful” advice.
Melanie McGovern, a spokesperson for the Better Business Bureau (BBB), calls it “good old-fashioned impersonation” with a modern twist. “Scammers use big names—apps, retailers, products we trust daily—to trick people into spilling info,” she said. Her tip? Double-check your app settings. “Ask yourself, ‘Did I sign up for text alerts?’ If not, don’t bite.”
Stay Vigilant
As cash apps weave deeper into our lives, scammers are cashing in on our trust. Arm yourself with strong security habits—think 2FA and skepticism—and you’ll stand a better chance of keeping your funds out of their hands. The stakes are high, and the fraudsters aren’t slowing down.