Venmo, Zelle, and Cash App are under scrutiny from Manhattan District Attorney Alvin Bragg due to concerns about user vulnerability to fraud.

Peer-to-peer payment services are now dealing with an estimated $1 trillion in payments, and the district attorney has noted a rise in frauds and scams as more people use these services.

Manhattan District Attorney Alvin Bragg has communicated his worries to the parent companies of Venmo, Zelle, and Cash App, highlighting the susceptibility of users to fraud. In his letters, he has called for these financial apps to strengthen their security measures to prevent instances where users’ bank accounts are being depleted of substantial sums. The request for heightened protections is aimed at addressing potential risks and providing better safeguards for users against fraudulent activities on these platforms.

Manhattan District Attorney Alvin Bragg has penned letters in response to a growing number of incidents involving fraud and theft through the exploitation of mobile financial applications on personal electronic devices like iPhones. Bragg emphasizes the need for immediate action to enhance security measures and protect users from such exploitative activities.

Over the past year, theft incidents have occurred in various parts of the United States. In Los Angeles, individuals were robbed at knifepoint, resulting in the loss of thousands of dollars through Venmo. Additionally, in Orlando, a woman had a substantial amount of money drained from her Venmo account after allowing a child to use her phone. Similar thefts and robberies have been publicly reported in states including West Virginia, Louisiana, Illinois, Kansas, Tennessee, and Virginia.

As per Bragg’s letters, unauthorized individuals gain access to unlocked phones, siphoning significant sums from bank accounts. They make purchases and open new accounts using financial information from mobile financial apps. Offenders also take control of phone security by changing passwords and settings. The simplicity of gaining large amounts quickly is encouraging many to commit these crimes, resulting in substantial financial and, in some cases, physical harm to residents.

The district attorney is urging Venmo, Zelle, and Cash App to enhance security. The suggested measures include placing limits on transactions, implementing a secondary verification process that could take up to a day, and improving monitoring for any unusual activity.

Bragg is concerned about a rise in illegal activities due to insufficient security measures and business decisions. He has requested meetings with the companies to discuss these issues. However, Square Inc, the owner of Cash App, and Paypal, which owns Venmo, have not responded immediately to ABC News’ request for comment.

Responding to the Manhattan DA’s comments, a spokesperson from Early Warning Services, the operator of Zelle, acknowledged awareness of isolated criminal incidents mentioned in the letter. The spokesperson emphasized the company’s commitment to providing a safe and reliable service for consumers, highlighting ongoing efforts to strengthen Zelle’s security. The statement noted that less than one-tenth of one percent of transactions are reported as fraud or scams, and this percentage is decreasing.

The spokesperson further explained that participating financial institutions in the network are obligated to reimburse consumers for confirmed fraud claims. In case of being a victim of a crime, consumers were advised to contact local authorities and their bank or credit union to initiate the claims process.

Source: ABC News