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Cash App Scams Are On The Rise: How To Protect Yourself and Your Transactions

Cash App Scams Are On The Rise: How To Protect Yourself and Your Transactions

By Scott Gaertner, Associate Broker

A recent news story on local TV news channel ABC 15 caught my attention and I wanted to share its message of raising awareness of cash app scams so that our Scottsdale North residents stay safe and vigilant—especially during major transactions like real estate purchases.

In the story (you can find it on ABC15.com by searching ‘Arizona woman loses thousands of dollars in cash transfer app scam’), veteran Valley journalist Fay Fredricks tells the harrowing tale of an Arizona family that unfortunately lost $10,000 in a real estate scam. The family thought they were purchasing their dream home and transferring the money over Zelle to who they assumed was a legitimate real estate agent—only to find out that it was a scam.

“When they say that it’s not going to happen to everyone, ‘I’m too smart, it’s not going to happen.’ It can happen,” warns the local victim of the scam to ABC 15. According to Fredericks’ reporting, the Arizona Attorney General’s Office has received multiple complaints about money transfer scams over the past year.

The Rise of Cash App Scams
According to the Arizona Attorney General’s Office, in 2016, Arizona placed at number 19 for states reporting consumer fraud and tenth among states reporting identity theft. Scam artists victimize consumers of all ages, backgrounds, and income levels, but the elderly are disproportionately targeted.

During the pandemic, digital payment apps such as Venmo, Zelle, Cash App, and others, grew in popularity. This past summer, the U.S. Public Interest Research Group (PIRG) released a report showing that scams involving cash apps rose.
“People are complaining, not just once, they’re complaining for weeks or months at a time and they’re getting no result,” Ed Mierzwinski, Senior Director of Federal Consumer Programs at U.S. PIRG, told Scripps National in a news report. “A big problem with the scammers and the apps is that when you initiate the transaction and send the money to the ‘bad guy,’ it’s not an unauthorized charge under the act. Congress should fix that.”

How You Can Protect Yourself
To protect yourself from cash app scams, experts suggest treating cash apps such as Zelle, PayPal, Cash App, Venmo, and others like, well, cash. Use them only with trusted friends, family, and retailers.

Other expert tips for avoiding cash app scams include:
• Set privacy settings on these apps to the most private they can be.
• Only send money to people you know and trust.
• Double and triple check emails or usernames.
• Watch out (and question) unexpected money requests.
• Be aware of fake scam emails. One tip is to compare e-mails to the ‘contact us’ page on the app’s website.
• With apps like Zelle that are attached to your bank account, be sure to have a strong, unique login, and two-factor authorization.
• With all apps, have a unique login and password. Change your password occasionally, especially if it may have been compromised.
• Never give anyone your login and password.
• Always question an email or text that’s from a cash app.
• Consider forgoing cash apps when possible and use credit or debit cards, which come with a bit more security when it comes to transactions.
If You Think You’ve Been Scammed
If the worst happens and you think you may be a scam victim, contact the app you used (there’s often a contact us form on their website) and your bank right away. The Arizona Attorney General also notes that if you believe you have been the victim of consumer fraud, you may file a consumer complaint online at azag.gov/complaints/consumer or call them at 602-542-5763 to request a complaint form.

Real Estate Fraud Schemes
In the ABC 15 story that I first mentioned, the scam victim lost $10,000 of hard-earned money in what she thought was a legitimate real estate transaction. To avoid doing this, I recommend only working with a local real estate agent with a trustworthy track record and using only traditional methods of payment in the real estate transactions.
Wire fraud has also become a huge problem for home buyers and sellers. Look for another article coming soon on that topic.

Our team has decades worth of experience in local real estate and can help Scottsdale North residents to safely navigate the real estate process. If we can help in any way, give us a call at 480-634-5000.

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