Oregon Attorney General Ellen Rosenblum co-led a bipartisan letter from 33 attorneys general to Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB) calling for stronger consumer protections for platforms and apps of money sharing.
Popular payment apps include Apple Pay, Venmo, Square, Zelle, and others. Attorneys General point to an increase in consumer complaints related to these payment platforms, especially consumer complaints about difficulties in reaching customer service representatives, inability to recover funds and fraudulent money transfers by customers. third-party crooks. These payment platforms are sometimes marketed as a solution for consumers who do not have access to traditional banks, even though these applications are not considered a bank.
âEspecially during the pandemic, consumers have relied on payment apps as a virtual and secure way to send money fast,â Rosenblum said. âBut as these platforms explode in popularity, the risk of being scammed and fraudulent also increases. As our letter urges, it’s especially important that these platforms use safeguards to protect consumers against fraud and provide better customer service if something goes wrong. “
The letter addresses three major issues: customer service, account access, and third-party scams. Highlights of the letter include:
Problem 1: Customer service
Complainants say they can’t contact customer service representatives, and when they do, they face long wait times or never manage to reach a human representative. A customer service email address or chat feature is often difficult to find or requires you to go through multiple layers to access it. Speaking directly with a customer service representative is an important feature that is still desired by many, and one that should not be overlooked even with advancements in technology.
Other complaints relate to the inability of consumers to access or transfer money, including funds deposited directly into their accounts by their employer or the government, for example, paychecks, unemployment benefits and the funds of the CARES law. Such issues prevent consumers from using their own funds, and these issues are exacerbated by the inability to connect to customer service. Consumers can be banned from their accounts without warning or explanation, or because the consumer has a problem with their email address or phone number, and the consumer may be left with no further recourse.
Problem 3: third-party scams
Many consumers have been scammed for hundreds or thousands of dollars by other users of these payment platforms. Scammers are drawn to real-time payment platforms, in large part because they don’t need to reveal their true identity to open an account. The complaints describe a wide range of scams. In some cases, third parties have contacted consumers through social media offering them investment opportunities or prizes in return for payment.
In others, con artists pose as family members and demand money from unsuspecting consumers. In some cases, fraudsters take advantage of the platforms’ limited customer support systems. Because customer service contact information can be difficult to find, many consumers try to find a phone number by searching the Internet. This leads consumers to encounter fake customer service phone numbers, which direct consumers to con artists who engage in tech support scams.
Perpetrators of such scams offer to help consumers for a fee (processed through the payment platform) or to convince the consumer to allow them access to their device or account, thereby allowing the perpetrator to quickly empty the fund account.
Letter from the Attorneys General
If you believe you have been the victim of a payment app scam, report the fraudulent transaction to the company behind the money transfer app and ask if they can reverse the payment. If you’ve linked the app to a credit or debit card, report the fraud to your credit card company or bank. Ask if they can cancel the charge.