Peer-to-peer payment apps like Venmo and Zelle make paying for things a breeze, but there’s a catch: Many of the apps don’t offer the same level of protection against fraud that most credit cards do, making them the perfect payment method for online predators to take advantage of.
When you pay someone directly using a peer-to-peer app, there's no way to recover your money unless the other party agrees to return it, a problem Consumer Reports said happens way too often.
In an AARP survey of Americans 18 and older, more than half of respondents incorrectly thought they could reclaim money sent in error when using peer-to-peer payment apps.
Early Warnings Service, the network operator behind Zelle, told CR that “Consumers should only send money to people they know and trust when using Zelle. Treat it like cash and beware of ‘too good to be true’ situations.”
Until laws are changed, consumers should be very careful when they use peer-to-peer payment apps.
CR has some P2P tips to help protect yourself:
- Send money only to people you know and trust
- Exercise caution when paying businesses with P2P apps
- If you suspect something may not be right, go to the Better Business Bureau’s Scam Tracker website, which can give consumers an idea if a product or service is a target for online predators
Consumer Reports is warning people not to use P2P apps for business purposes. in fact, the terms of service for most apps prohibit the use of them for purchasing goods and services. Instead, look for a payment app specifically created for business users, like Square Cash for Business or PayPal.