With $2.4 billion in payments transacted via Venmo in 2014, the popularity of this free payment system is clear. Promising smooth, fast, and easy money transfers, Venmo has become a fun and cool way for many people to send money in the six years since it was founded. But it seems it’s also become a smooth, fast, and easy channel for scammers to steal thousands of dollars from unsuspecting users. Hundreds of people are being defrauded because of one line in Venmo’s user agreement—one that scammers know and we don’t: “Business, commercial, or merchant transactions may not be conducted using personal accounts.” So what does this mean? Well, next time you sell something and receive payment via the app, just be aware that Venmo is not responsible if the buyer decides to reverse that money. Why? Because this is a “merchant” transaction, not a personal one. And once it happens, there’s nothing Venmo can do to help, because “your transactions violated the User Agreement.”
Ata Movassaghi, who had money stolen while selling basketball tickets on Venmo, told Slate that he emailed Venmo’s head of fraud to alert the company of the dangerous scam, only to receive this reply: “Venmo has a complete understanding of the scam plot you fell victim to. … There is nothing Venmo can do to comfort you. … You made an innocent mistake, and you paid for it.” While the company says these scams are “very infrequent," Venmo needs to ensure its users know as much about the fine print as its scammers know.
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Do you use Venmo? Have you ever been scammed on the mobile payment system? Would you feel safe using it now? Let us know in the comments.