Majority of Venmo, PayPal Users Report Being Scammed

A majority of Venmo and PayPal app users have reported being scammed, according to new research from Security.org.
In 2024, 83 percent of Americans reported being scammed or targeted, which was a significant jump from the 68 percent who said the same in 2023 and 48 percent in 2022.
Across the United States, roughly 79 percent of residents use peer-to-peer apps like Paypal, Venmo or Zelle at least once a week. Users are able to send payments back and forth between friends and family, making tasks like splitting rent or a restaurant check easier than ever.
More From Newsweek Vault: Learn About the Best High-Yield Checking Accounts
However, they also expose you to risks if you decide to send money to an unknown user.
Scammers often targeted users by saying the victim had won a price but needed to pay fees or taxes to receive it, while others asked for a payment authentication code to approve a transaction, according to Security.org.
It was slightly rarer, but other users reported receiving a text or email with fake customer service information, leading to the scam attempt. Meanwhile, 6 percent said they had a scammer build an online relationship with them and then ask for money under false pretenses.
More From Newsweek Vault: Best Ways to Pay for Walmart or Amazon Purchases
PayPal was the place where users experienced scams the most, but it is also one of the more widely used apps, with more than 400 million accounts currently.
Americans also said text message scams were becoming increasingly common, with 70 percent of Americans having received a text from someone they didn’t know, and 15 percent clicking on a link from an unknown sender.
More From Newsweek Vault: Online Banks vs. Brick-and-Mortar Banks
Social media also was a huge source of scamming behavior, with one in four adult social media users saying they were targeted, usually on Facebook and Instagram.
To prevent yourself from becoming a victim of a PayPal or Venmo scam, there are certain steps you can take.
For one, you should always verify someone’s identity by using phone numbers and email addresses.
If you’re paying a new person for the first time, send a $1 test payment to confirm the correct person received it. This can prevent you from sending large amounts of money to the wrong person and then never getting it back.
And remember, when people reach out about something urgent that requires immediate financial details, you should always be skeptical.
“All scams follow the same patterns. An urgent opportunity or an urgent emergency, both triggering panic in the victim,” Drew Powers, the founder of Powers Financial Group, told Newsweek. “The best advice for seniors is to take a step back, compose themselves out of panic mode, and then take all possible steps to confirm the opportunity or emergency with others.”
You should also move any money received on an app like Venmo or PayPal to your bank as soon as possible and monitor all accounts closely in case fraud occurs.
“While P2P [peer-to-peer] apps are beneficial, you shouldn’t use them for all types of transactions since fewer protections are in place in case of fraud,” Security.org said in its research. “Instead, use credit or debit cards with built-in purchase protections whenever possible.”
Millions of Americans are likely affected by peer-to-peer payment app schemes, according to the FBI, and it’s not always who you might imagine would be the easiest targets.
While some previously believed seniors were most at risk of losing their money in digital scams, people aged 18 to 24 are losing more of their money to these fraudsters, a recent report from the Better Business Bureau’s Institute for Marketplace Trust found.
The median dollar loss for young adults was $200, which was $50 more than median losses for those 25 and older. The lowest financial loss reported was for people between 55 and 64, at $123.
“We continuously review and update our operating rules and technology practices to improve the consumer experience and address the dynamic nature of fraud and scams,” a spokesperson for Early Warning Services LLC, the network operator of Zelle, previously told Newsweek.