Securing the Digital World

How to Avoid Money Scams While Holidaying at Home

Jul 16, 2020 | by Alexandra Bilinkis |

The use of electronic payments has increased over the past few months as concerns grew that the use of physical currency could aid in the spread of a global virus. Fidelity National Information Services (FIS) reported a 200% jump in new mobile banking registrations, while mobile banking traffic rose 85%.

Not only did the health crisis stimulate a rise in online payment services, but it coincided with high levels of unemployment, generating an ideal setting for advance-fee scams to trick users of peer-to-peer (P2P) payment applications like CashApp and Venmo. With individuals filing for unemployment benefits at record levels, many are desperate for additional funds and falling for "flipping money" scams. According to the Federal Trade Commission, through May 21, nearly 52,000 Americans lost at least $38.6 million due to scams, with about 45% of the complaints reporting an average loss of $470.

Many will spend their summer vacation at home this year, creating a new vector for fraud attacks. Instead of exploring tourist cities or enjoying sunny beaches, many will choose to spend their holidays experiencing something online instead of hopping around souvenir shops and scrolling through their Instagram feeds to discover photos under the hashtag #sightseeing.

As people are spending more time online for leisure than ever before, fraudsters are creating targeted giveaways on Twitter, Instagram and YouTube videos, claiming to show users how to earn free money via CashApp. Scammers have taken advantage of vulnerable users by tricking them into:

  • "Cash flipping" to grow their capital: Victims are asked to pay a smaller fee upfront before receiving a higher sum of money in return for re-posting or "liking" the scammer's post. Fraudster requests can vary up to $500, claiming they would multiply the transfer times ten, or $5,000.
  • Providing their bank account information to receive a "free" check: If the user cannot pay the "receiver's fee," the scammer may ask for the account number, routing number, name on the account or even the bank login credentials to supposedly directly deposit a check.

There are also fraud scams lurking on Venmo that prey on absent-minded behavior. The average, everyday Venmo users might unintentionally take part in money laundering of stolen funds because fraudsters have developed a creative way to steal money by involving innocent people in their insidious plans, that relate to:

  • Accidental transactions: Victims receive as much as $1,000 from someone they do not know, after which they are then asked to return the transferred money that was initially sent from a stolen credit card.
  • Recurring payment requests: Users' phones may also get bombarded with dozens of requests from strangers, both for money and to connect on the app, as scammers hope that their requests will be accidentally accepted.

Even though P2P payment applications are taking necessary measures to prevent fraud — such as setting password generators, providing the option to turn off default public settings and creating security lock pin entries — that may not be enough to protect your private information and secure your savings.

So, what can be done? Remember these 10 simple steps to maintain security and reduce the risk of losing financial savings during summer holidays at home:

  1. Never share your login credentials.
  2. Do not pay a "receiver fee" when asked for verification to enter a giveaway.
  3. Ignore verification requests that prove you're "real" and report the user.
  4. Verify users who post on Twitter and Instagram promoting their giveaways under COVID-19 related hashtags.
  5. Do not click on links that ask you to log into CashApp to receive a "cash prize."
  6. Do not engage with tweets that claim to give money if you retweet the post.
  7. Modify transaction visibility by making payments "Private" or "For Friends."
  8. Manage security settings by turning on additional security measures, such as multi-factor authentication, applying a PIN or using a biometric authenticator.
  9. Ask the unknown sender to contact customer support to cancel a mistaken transaction.
  10. Link your money transfer application to a credit card to get additional bank protection upon losing funds for an unreceived service or good.

Stay vigilant when it comes to fraud — throughout this summer and beyond. Think of P2P transactions as equivalent to sending real cash and enjoy your holidays without worrying about getting scammed.