Published on: January 26, 2024

Manhattan District Attorney Alvin Bragg sent letters to the companies that own Venmo, Zelle, and Cash App, demanding that they increase protections for consumers.

DA Bragg argued in his letters that these companies don’t offer the level of security to safeguard consumers from fraud that’s “draining bank accounts of significant sums of money.” He noted that “frauds and scams have proliferated” as more people are using peer-to-peer payment services.

Bragg’s letters said he was writing “in response to a growing number of” fraud and theft incidents “through the exploitation of your company’s mobile financial applications on personal electronic devices such as iPhones.”

“I am concerned about the troubling rise in illegal behavior that has developed because of insufficient security measures connected with your software and business policy decisions,” Bragg’s letters said.

“These crimes involve an unauthorized user gaining access to unlocked devices and then draining bank accounts of significant sums of money, making purchases with mobile financial applications, and using financial information from the applications to open new accounts,” Bragg’s letters said.

“Offenders also take over the phone’s security by changing passwords, recovery accounts, and application settings. The ease with which offenders can collect five- and even six-figure windfalls in a matter of minutes is incentivizing a large number of individuals to commit these crimes, which are creating serious financial, and in some cases physical, harm to our residents,” the letter continued.

Bragg urged these companies to put a strict limit on transactions, enforce a secondary verification process that could take up to a day, and enhance surveillance of abnormal activities.

In a statement for Early Warning Services, which operates Zelle, a spokesperson said, “Providing a safe and reliable service to consumers is the top priority of Early Warning Services, LLC, the network operator of Zelle, and our 2,100 participating banks and credit unions.”

” As a result of our continued efforts to build on Zelle’s strong foundation of security, less than one tenth of one percent of transactions are reported as fraud or scams, and that percentage keeps getting smaller,” the statement added.

CashApp is “committed to building trust with our customers and investing in areas that help build a safe and secure platform,” a spokesperson for the company said in a statement.

“We work proactively and diligently to safeguard our customer’s money and mitigate against the risk of fraud on our platform through a combination of preventative controls like multi-factor authentication, account transaction limits, fraud detection, and consumer education. We also partner with law enforcement agencies to detect and combat criminal activity,” the statement said.

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• Source: https://www.safetydetectives.com/news/venmo-zelle-cash-app-users-at-high-risk-of-fraud-manhattan-da-warns/