Money-transfer applications like Cash App are gaining popularity as people ditch cash because of the Covid-19 pandemic. But scams on these applications are on the rise as well. Fraudsters and con artists are always devising sneakier and more convincing ways to rip you off. However, these scams have common characteristics that make them noticeable to the trained eye.
Before we dive into common Cash App scams and how to protect yourself from them, here’s a quick guide on how Cash App works.
What are peer-to-peer (P2P) payments?
P2P payments are simple and fast digital transactions in situations you’d normally use cash. Usually, P2P apps connect to a user’s debit card or bank account. Cash App rose in popularity because it’s fast and simple to create an account and has numerous features like trading cryptocurrency and stocks, a free debit card linked to the Cash App account, and weekly cash giveaways. Unfortunately, minimal barriers to entry also make Cash App attractive to cons and fraudsters.
How Cash App works
Cash App links to a user’s bank account, debit, or credit card. The user scans a QR code or enters a username to find another Cash App user and send payment from the linked account or the Cash App balance. Funds received from other users are reflected in Cash App’s balance and can be used to complete payments or transfer to linked accounts.
To start using Cash App, download the app, create an account, and link payment methods. You’ll need to complete ID verification when using some features like Bitcoin trading, but not for basic transfer functions.
What are the common scams on Cash App?
Common scams through Cash App typically involve different forms of phishing. Merchant fraud, where a fraudster sells a product or service they don’t intend to deliver on and tricking users into getting their login information, is especially common.
P2P apps are vulnerable to a variety of scams. Cash Apps scams that have been reported include:
- Fake support number – fraudsters create fake customer support phone numbers and publicize them. When a Cash App user runs into problems like a double charge or an unknown transaction, they google Cash App’s support number and use one from the results. The scammer pretends to be a Cash App representative, asks for login information, and cleans out your bank account or Cash App balance. These scammers use “search poisoning” to ensure their fake support phone numbers appear top on search results. To protect your money, contact support through the app and never share your login details..
- Cash flipping – scammers on social media are promising Cash App users 20x or 30x their money. They claim if you send them money, they will give you more back. Say you give $200; they promise to give you $4,000 back. Usually, the scammers pretend to be Cash App technicians or members of the #CashAppFriday team. This scam is also common on other payment platforms like Moneygram, Zelle, and Venmo. The scam works because P2P transfers are instant and irreversible, and the fintech companies don’t help scam victims.
- Cash App Friday scam – the #CashAppFriday sweepstakes run by Cash App on their official Twitter and Instagram accounts was bound to attract scammers. What started as a gimmick transformed into an official giveaway. Each Friday, 10 people win $500, 20 win $250, and 100 win $100 each. People trying to win the giveaway will get contacted by fraudsters masquerading as Cash App staff claiming falsely that they won. However, to collect the money, one has to pay some money. Scammers ask for small amounts to make it more believable.
Can you chargeback on Cash App?
Because Cash App payments are instant, they are irreversible. A chargeback on Cash App doesn’t work as it does in other payment options where the issuing bank retrieves funds from the merchant’s account until the dispute is resolved. With Cash App, the chargeback process is nothing but a name – it depends on the recipient being willing to refund the money.
How do I file a dispute?
While you can’t chargeback an in-app Cash App payment, if you are using the app’s linked debit card, Cash Card, you can open a dispute when a merchant refuses to offer a refund. Cash App will investigate your claim and file a dispute with the card network according to regular chargeback rules.
To file a dispute, follow the following steps:
Click on Activity on Cash App’s home screen
Choose the transaction in dispute and click on the three dots in the top right corner
Click on Need Help and Cash App Support and then, Dispute this transaction.
What is a pending transaction?
When you complete a purchase through Cash App, funds are deducted from your account before they are reflected on the merchant’s end. At this stage, you cannot dispute the transaction. A pending transaction is captured in 10 business days. A pending transaction might initially be authorized for a different amount than the final payment.
Can I dispute a recurring subscription?
Yes, you can. However, you’ll have to confirm with the merchant to ensure the subscription is canceled.
What to do after a Cash App scam
Once you realize you’ve been scammed, change the Cash App PIN and report it to Cash App’s support through the app. Unfortunately, the process is long and can take days to play out. Hopefully, Cash App steps up its security protocols to safeguard your money and comes up with ways to get it back.
Interesting Related Article: “How to Avoid Online Scams“
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