Michigan AG warns of persistent Venmo scam plaguing consumers

(FOX 2) - Where people take their money, scammers are sure to follow and the peer-to-peer (P2P) mobile apps like Venmo are one of the biggest sources of transactions between friends and family.

In the latest alert worrying the Michigan Attorney General, Dana Nessel is warning consumers to be wary of thieves using the app to trick people into sending money to them.

The scammer sends a transaction they pass off as being accidental before asking for the money back. In fact, it's money that came from a stolen credit card number. Eventually, the real holder of the credit card may succeed in getting that payment reversed as fraudulent.

But the individual who returned the supposedly accidental deposit will experience a debit from the credit card company and any transferred funds will then come out of the innocent person's Venmo balance.

Melanie McGovern with the Better Business Bureau said the apps are used so frequently and conveniently that people don't think twice about them.

"Unfortunately, scammers have found that it's an easy way to trick people out of their money," said McGovern.

The advice from the BBB is to not react too quickly when an accidental request from an unknown account shows up. 

"The BBB advice is to make sure you know who is sending you money. If it’s someone who you’re unfamiliar with, don’t do anything," said McGovern. "Report a fraudulent activity to the app that you are using."

Last year, scams reported to the BBB involving P2P apps included a median loss of about $200.

"In a lot of cases, when you authorize a transaction, that money is gone because you are agreeing to the terms of service. You want to make sure you know who you are sending money to at all times," said McGovern.

Victims of a scam involving P2P payment apps can file a complaint with the Federal Trade Commission. To file a complaint with the Attorney General, or get additional information, contact the Consumer Protection Team at 517-241-3771.