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Like any product, consumers must make informed decisions with regard to the use of financial technology products including the “peer to peer” applications for smartphones, otherwise known as “prepaid accounts” or “P2P account.”
P2P Apps have become increasingly popular through companies like Venmo, Zelle, Cash App, and PayPal. While these apps can be used safely, it is important to make sure you understand the app’s terms of use and are careful about who you are sending funds to, said Connecticut Attorney General William Tong.
Consumers should carefully consider the agreement terms before choosing a particular P2P product. While these accounts offer simplicity and ease of use, Connecticut consumers should decide for themselves whether a product fits their specific needs. Then, after opening a P2P account, the onus remains on the consumer to be vigilant.
The Office of the Attorney General has received several complaints about P2P apps like CashApp and Venmo. In one instance, a man complained that CashApp locked his account with $3,000 in it, which he needs to pay bills. In another instance, a man complained that he sent $2,250 through CashApp to a fake account that scammers had disguised as his bank.
Another Connecticut woman used CashApp to pay a breeder for a puppy. When she never received the puppy, she was unable to cancel her transaction within the app and get her money back.
Here are some tips to use P2P accounts safely:
- Never give out information over the phone to someone purporting to be from the company that issued you the account.
- When sending money, enter addresses carefully. It is easy to send money to type the wrong account address, and then very difficult, if not impossible, to retrieve it.
- There are a vast number of reports of hacked prepaid accounts. Conduct regular reviews to screen for suspicious activity.
- Review the terms of use of the P2P account carefully. Make sure that you are comfortable with the contract terms set out by the prepaid account issuer.
- Understand the difference between authorized and unauthorized transactions.
To file a complaint with the Office of the Attorney General visit https://www.dir.ct.gov/ag/complaint.
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