Venmo, the person-to-person payment smartphone app, is a big hit with millennials and scammers alike, due to the app’s potentially dangerous “reversal” option.
Venmo links to a credit card or a bank account and lets its users send or receive payments. For example, instead of splitting a bill three ways while at dinner with friends, one person picks up the tab and everyone else pays them back over Venmo.
But reporters at NBC Owned Stations across the country found some users who say they got digitally burned.
“This person was very eager to buy the car,” said Craigslist seller Alex Wilburn. “I met him right here at the mall.”
Wilburn says the buyer who responded to his Craigslist ad for this 2001 Acura sent him 1,800 dollars via the app.
“The way Venmo works is if somebody transfers you money, you see it in your account and you think it’s there to stay,” said Wilburn.
Wilburn then signed the title over and drove back to his apartment to help his customer replace the tags. Then, the new owner drove off.
Twelve hours later, Wilburn says he got an email from Venmo saying the payment had been stopped.
“And then I actually saw the money out of the Venmo account reversed and sent back,” said Wilburn. “I couldn’t believe it.”
In Connecticut, several sellers accept payments through Venmo on items for sale on Craigslist. Craigslist advises its users to deal locally, face-to-face, and to never give out financial information such as a bank account or payment apps like Venmo or Paypal.
“People think it’s instantaneous, and it’s actually not,” said Fatima Hasan of San Jose, California.
Hasan says she’s out 900 dollars for the three football tickets she sold. Even more frustrating to her is how, she says, Venmo responded.
“I’m mad,” said Hasan. “I’m very mad that Venmo didn’t do anything.”
Venmo spokesperson Josh Criscoe told NBC there is no buyer or seller protection, and that the app is designed for payments between friends and people who trust each other.
Venmo’s user agreement also says “personal accounts may not be used to receive business, commercial or merchant transactions.”
Criscoe added any business usage of Venmo requires an application and explicit authorization.
The company also said it recently implemented alerts within the app, designed to protect users and discourage activity that violates their user agreement.
“You’ve got to read those things to really, actually, know what you’re using,” said Wilburn.
Photo Credit: NBC OTS