How to avoid digital wallet scams

How to avoid digital wallet scams
Tips on how to avoid digital wallet scams (WFXG)

GEORGIA (WFXG) - According to the Better Business Bureau, digital wallets such as PayPal, Venmo, Zelle, and Apple Pay become more popular each year. They come in handy when you need to pay a coworker for lunch or send money to a friend. They let you pay for goods and services online. And they let you check out at stores with a simple tap of your phone against a register.

A digital wallet links consumer bank accounts, credit cards, and debit cards to an app. So while they can be great for convenience, they can also be tempting to scammers who can use one app as a gateway to all of your banking and credit information.

Scammers have been targeting digital wallets and executing variations on old schemes, including phishing and check cashing schemes tailored to the new technology.

Loss or theft of the device containing a consumer's mobile wallet is another common problem that may arise and sensitive information can be compromised. Access to a digital wallet on a device can be prevented with a strong password or using biometric security devices available on some current smartphones.

Another risk involved in digital wallet adoption is that unlike more traditional banking systems, many digital wallet vendors will not shoulder the cost of fraud. This means that some consumers who have paid scammers using a digital wallet may not be successful in getting the company to reimburse them for their losses to the fraud. Consumers should be aware of any liabilities they may assume before choosing to use a digital wallet service.

BBB advises consumers to look out for the following scams when using digital wallets:

  • Fraudulent payment methods:  In one common scheme, scammers will connect a stolen credit card to their digital wallet account. They then look for people selling big-ticket items (a computer, tablet, or car) on Craigslist or another online service. The scammers will offer to pay for the product using their digital wallet. The seller accepts the payment and sends the item, but soon discovers that the payment sent is not legitimate, and the money is removed from his or her account. The seller is then without either the item or the money. Because of this problem, digital wallet services often advise that you do not accept payments through their service if you do not know the sender.
  • Canceled payments:  Some digital wallet apps take several days to process a transaction. Scammers take advantage of this by setting up transactions and canceling them before they go through. By the time victims realize they’ve never received the money, the scammers are long gone.
  • You've been paid: Some fraudsters try to trick you into thinking that you've received a payment. They want what you're selling for free. Before you ship anything, log into your digital wallet account and check that you were actually paid.
  • You have been paid too much: Fraudsters may try to convince you that you've been paid more than you were owed. For example, a spoofed email says that you’ve been paid $500 for a camera you listed at $300! The sender asks you to ship the camera in addition to the extra $200 you were “paid” by mistake. In this example, the scammer wants your camera AND your money but hasn’t actually paid you at all. Don't fall for it! In another version of this scheme, scammers overpay for items with a stolen credit card. The stolen funds will be removed from your account, and if you send the scammer money they “overpaid,” you will that money, too.
  • Fake official emails: Many fraudsters send spoofed emails warning that an account is about to be suspended and that the account holder must enter their password in a spoofed webpage. Generally, digital wallet vendors will never ask you to enter your password unless you are on the login page.

Protect yourself when paying with a money transfer app by following this advice:

  • Use money transfer with friends: Protect yourself from scams by only using money transfer apps for their intended purpose -- sending money to people you personally know.
  • Link your money transfer app to a credit card. As with many other purchases, using a credit card will help protect you if you don't get the goods or services you paid for. Linking to a debit card or directly to your bank account does not give you that added protection.
  • Check your account to be sure that the money transferred: It takes a few days for some digital wallet payments to transfer. If you have any concerns that a payer didn't really send the money, be sure to check your account directly.

For more BBB consumer tips, visit

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