Manhattan DA pushes Venmo, Zelle, Cash App to crack down on fraud

(NEW YORK) — Manhattan District Attorney Alvin Bragg is raising red flags on what he calls a growing problem linked to the rise of mobile payment services such as Venmo, Zelle and Cash App.

And Bragg said he is looking forward to working with those companies to secure people’s money.

Bragg told ABC News’ GMA3 Monday that there has been a large jump in crime surrounding mobile payment services, with users having huge sums of money taken out of their accounts without their permission or knowledge and even becoming victims of alleged hold-ups on the street.

“So right now, [with] two taps, if someone has your phone, they can have your life savings,” Bragg said.

Last week the DA sent letters to Venmo, Zelle and Cash App in which he expressed his concern about the problem and cited several examples of users being victimized.

In the past year, there have been thefts stretching from Los Angeles, where several people were robbed of thousands of dollars through Venmo at knifepoint, to Orlando, Florida, where a woman had thousands drained from her Venmo after a child asked to use her phone, the DA said.

Similar thefts and robberies have been publicly reported in several states across the country, according to Bragg.

The district attorney called on Venmo, Zelle and Cash App to adopt additional security measures, including imposing limits on transactions and requiring two-step verification. He also pushed for better computer monitoring services that could catch the fraud faster.

“It’s 3 a.m. in France and you’ve never been in France before,” Bragg cited as an example. “We want them to flag that transaction is suspicious.”

The three major mobile payment companies released statements after Bragg sent the letters responding to his concerns.

Early Warning Services LLC, the network operator of Zelle, said in its statement that “as a result of our continued efforts to build a strong foundation of security, a less than one-tenth of 1% of transactions are reported as fraud or scams, and that percentage keeps getting smaller.”

A spokesperson for Cash App said in its statement that it has several “preventative controls like multi-factor authentication, account transaction limits, fraud detection, and consumer education,” and partners with law enforcement to crack down on fraud.

PayPal, the parent company of Venmo, said in a statement that it has “sophisticated fraud detection tools” to protect its users, and has “several options in place to enable enhanced layers of security and protection directly within our apps.”

Bragg said he is still waiting for a meeting with the companies to address the problems and discuss more solutions before the fraud grows.

“So this is a big part of our life, and we see it in a lot of our enforcement where [more] people are using things. The fraud follows,” Bragg said.

Copyright © 2024, ABC Audio. All rights reserved.