Jaimie Torres keeps a very close eye on her bank account which proved lucky a few weeks ago. She almost instantly noticed a surprise charge. $378 left her bank to some company she'd never heard of before called “Venmo.”
Venmo is an app that allows users to send and receive money transferred directly to or from the user’s bank account.
The transaction from Torres’ account is fraud, she said. Still, getting her money back wasn't easy.
"We tried calling Venmo, they just directed us to our lending institute."
Torres’ bank eventually gave her a refund and got her set up with a new bank account.
A spokesperson from Venmo (PayPal) wrote that "fraud prevention" is a "top priority for us."
Venmo also said that the solution to cybercrime and identity theft using its app is for consumers to do exactly what Torres did: watch her account closely and “immediately change their bank account username and password,” when fraud is detected.
But, all of this got Torres wondering: with the new slew of money-transfer-apps tied directly to the places we store our money, how safe are they?
Consumer Reports recently conducted a study, rating five of them, focusing on privacy and security.
They didn’t find any of the services were “so bad you shouldn’t use them.”
Still, there are differences consumers should know about. Apple Pay for instance was the only one to score top marks for data privacy. It tries to take the least amount of data and keep the least amount of data to keep your privacy protected.
However, it’s only available if both the sender and the receiver use an Apple smart phone, watch, or tablet—and a newer version at that.
In fact, that’s one thing to note with P2P in general. You have to use the same service to exchange funds.
“So if I have to have Zelle, you have to have Zelle,” was said of a similar money transfer app. “If I have to have Venmo, then you have to have Venmo as well.”
If you do sign up for a service, Consumer Reports recommends you opt for the highest app privacy and security settings possible. Adding, for instance, a PIN or fingerprint authentication is a good idea.
Also, as fun as the feed may be, with Venmo you should really set it to keep your transactions private!
Most importantly, Consumer Reports says these apps should NEVER be used to send money to strangers. You should only pay people that you know.