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Beware Mobile
Money Sharing/Banking Apps
Woman had her checking account
cleaned out by hacker

October 24, 2017

Atlanta area woman Pam Clay who had her checking account, that was tied into Venmo, cleaned out by a hacker. Photo: Still image from WSB-TV video news report. Photo credit, WSB-TV
Chronicle staff

(ATLANTA, GA.) -- What could be easier, safer and more convenient than using a trusted mobile money sharing/banking app on your smartphone or tablet?

After all, that's what a number of industries want us to do -- use our phones and other mobiles to eventually replace our PC's and laptops for everything including banking, money sharing, purchasing and more.

But an Atlanta area woman found out the hard way that some mobile money sharing apps may still be in the horse and buggy age when it comes to security and protecting your money.

Pam Clay told WSB-TV in Atlanta she feels she's been robbed "three times" after someone hacked into her money sharing app Venmo and cleaned out her entire checking account.

Venmo, for those of you who don't know, is one of the hottest money-sharing/banking apps out there.

The story of Venmo

Founded in 2009, Venmo began as a payment system through text messages and then company officials turned the Venmo platform into a "social network in itself," says Investopedia.

Venmo, now a social network-money sharing-banking app, was eventually bought for $26.2 million by Braintree - itself operating as the payment system for many apps including Airbnb and Uber - and Braintree in turn was later bought out by the payment giant PayPal Holdings, Inc.

As Investopedia reported just a few days ago, "This latest boost to the company comes as Venmo will now be accepted at over 2 million locations, which is almost everywhere that PayPal is accepted in the U.S."

However, the report also notes that, "Although Venmo has enjoyed rapid growth and popularity amongst millennials, recent security blunders have led consumers to question the safety of the mobile payment platform."

You can count Pam Clay and her husband among those who now question the safety of using Venmo.

The jaw dropping phone call

Last Friday morning Pam was driving to work, she told WSB-TV and her husband calls on the phone with a question: who is “Sallie Fraser?"

Turns out someone using the name Sallie Fraser, without their knowledge or permission, transferred thousands of dollars from their account to her (his?) account using Venmo.

And here is why she feels victimized three times

Clay said the scammer took every last penny and when she told Venmo officials what had happened, a representative told her it was a problem she had to address with her bank.

Not their problemo, according to Clay.

"I’m at work thinking how did this happen to us? We’ve done everything right," she told the station. Clay uses the app through her Wells Fargo account to send money to her son from time to time.

"It’s almost like Venmo was their getaway car. They robbed us and they used Venmo to drive away with all of our money," she said.

The WSB report , published Monday night said Clay was told by the bank, "they need 10 days to investigate the fraud claim. In the meantime, she’ll have to survive without the money in her account."

And in an America where millions live paycheck to paycheck, that 10-day wait can be a huge, hard hit to take.

WSB-TV says it reached out to Venmo for comment on this story but as of Monday night had yet to hear a response.

"On their (Venmo) site it says they encrypt your information for safety reasons and to contact them if you feel your account has been compromised," said the TV report.

Evidently that web site does not tell you that after you contact them, you might be told to slug the problem out with your bank while you sit there with no money in your account -- money you might have badly needed for food, medicine, rent, auto repairs, gas and other bills to pay.

The station's consumer advisor Clark Howard says there are three things you can do to minimize (but not eliminate) the chance your account will be hacked into thus costing you a lot of money:

1. Limit the amount you can transfer from that app to $299.00 a week.

2. Set up two-vector authentication

3. Set up a second checking account (not your main account) that Venmo is tied into.



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