By Randy Hutchinson
President of the BBB of the Mid-South
Reprinted from The Jackson Sun
The use of mobile peer-to-peer (P2P) payment apps has exploded during the pandemic as more people move to online banking using their smartphones and look for easier ways to send and receive money. Experts say payment volume will exceed $1 trillion in 2023. Common uses of apps like Venmo, Zelle, and Cash App include splitting dinner bills with friends or buying something at a garage sale.
For the most part the apps are safe, but as with any payment method, there are risks. The Attorneys General of Tennessee and Mississippi joined with 31 other state AGs to submit comments to the Consumer Financial Protection Bureau about the nature of complaints that have been increasing since the pandemic began. They fall into three broad categories – customer service, account access and scams.
Consumers complain that in some cases they have a hard time finding customer support information, face long hold times, and have difficulty getting to a human being. The AGs say that communicating via email or chat function may require navigating multiple layers of access and that many people still want to talk directly to a customer service representative.
Inability to access or transfer money, sometimes without warning, is another frequent complaint that’s made even worse by the difficulty in reaching a customer service representative to rectify the problem. The AGs say these payment platforms are marketed as a solution for customers without traditional bank accounts who are especially impacted by an inability to access funds, including from government programs like unemployment and CARES Act benefits.
The BBB certainly shares the concern about scams. P2P payment apps are becoming a payment of choice for crooks because they can remain anonymous and once they get the money, it’s gone. Crooks may also agree to buy an item from you, pay using a P2P app, and then cancel the transaction after you’ve shipped the item. Or you may simply key in the wrong payee information or amount, hit enter, and not be able to recover the money from the recipient.
The platforms distinguish between money lost to fraud through no fault or involvement of the customer vs. a scam in which the customer authorized the transaction, albeit tricked into doing so. They may reimburse the customer in the first case but not the second.
The BBB offers these tips for using a P2P payment app safely:
- Only use it with someone you know and trust.
- Take your time entering payment information and double-check it before hitting send.
- Enable security settings and other measures offered by the app, including multifactor authentication that requires another form of verification besides just a username and password. And use a unique password.
- Remember that public Wi-Fi at places like coffee shops or libraries may not be secure for use in conducting financial transactions.
- Be wary of any business that only accepts P2P payment apps.
- Consider linking the app to a credit card rather than a debit card or bank account to take advantage of additional protections it may offer.
If you encounter a problem, don’t search for the app’s customer service number online. Scammers have established and advertise fake customer support numbers and when customers call them for help, they end up looting funds in the account. Go to the company’s website.