Greg's Corner

Payment app fraud may not be covered by your bank

By Greg Collier

As we have seen with the recent incidents of the Zelle scam, banks aren’t exactly rushing forward to reimburse customers who have lost money due to payment app fraud. Many mobile payment apps require their users to connect either a bank account or a debit or credit card to their accounts. This has allowed scammers to drain bank accounts from many of their targets using multiple apps. These apps offer little to no fraud protection, with many of them just pointing to a page on their website that says how to look out for fraud. In a multitude of cases, many banks have refused to reimburse their customers since the fraud was committed on a third-party platform.

For example, a couple in San Antonio, Texas, got a call from their credit union asking them about suspicious activity on their account. According to the credit union, there were 11 transactions that took place in the United Kingdom which amounted to $4000. Somehow, scammers got a hold of their Cash App information and were stealing money from the couple’s bank account through Cash App. The couple was angry since the credit union is said to normally call them for transactions over $500 but didn’t warn them about these transactions until it was too late. As with many of these stories, the credit union denied the couple a refund until the couple got the local media involved. All of a sudden, the fraudulent transaction was covered under the couple’s fraud protection on their account.

If you’re a frequent user of payment apps like Cash App, you may want to link a credit card to your account instead of a debit card or bank account. Credit cards offer many more protections than the payment apps do on their own, and you’ll have a much better chance of getting your money back. If you don’t have a credit card, on some payment apps, you can limit the amount of payment that can be made. Payment app users should also do a daily check on their balance, as the sooner you can catch the fraud, the sooner you can do something about it.