Watch Out for This Popular Venmo Money Scam

Don't get scammed!

Payment apps make paying friends, family, and small business owners easy. While these apps are convenient, you should use them with care. Unfortunately, scammers prey on innocent victims to steal money. You can continue using these apps, but it's important to be alert to avoid scams that could negatively impact your finances.

Venmo is a top payment app that you can use to quickly pay for purchases or pay back friends and family members. When making a payment from your Venmo balance, checking account, or debit card, it's free to send money to others.

Unfortunately, since this app has become increasingly popular, it has attracted scammers. They use apps like this to steal money from other people, and it could be hard to get your money back if you fall victim to a scam.

Don't fall victim to this Venmo scam

One common scam is on the rise. By knowing about it, you can avoid making a costly mistake.

Here's how it works: A Venmo user will get a mysterious payment sent to them. It appears to be a payment sent by accident, and the sender may explain that and ask you to send the money back to them.

Sadly, if it's a scammer -- sending the money back could result in you losing money.

If the original payment sent to you was made using stolen credit card or debit card data, and the actual card user reports the fraud and does a chargeback -- you'll be out that money.

If you're unsuccessful at getting your own payment reversed due to fraud, you'd be out the money you sent back to the scammer. It's a risk that isn't worth it.

What to do if a stranger sends you money

If you receive a mysterious Venmo payment that looks suspicious, don't send it back. Instead, get in touch with Venmo directly. They will take care of reversing the charge for you.

Don't be tempted to send the money back yourself, because it could be a scammer and you could lose your money. If this happens on another payment app, it's best to take the same steps and reach out to the app directly for clarification on what next steps to take.

Follow these best practices when using payment apps

Do you like to use payment apps? Follow these best practices to avoid losing your money:

• Only pay people you know. Don't use payment apps to send money to strangers. It's best to only send money to people you know in real life to avoid scams.
• Enable alerts. Within your app settings, you can enable notifications. This way, you'll be alerted quickly when a payment is sent to you so you can take the right steps to report unusual activity.
• Review all details before sending payments. It's best to double or triple-check all the payment details before you send a payment through Venmo or other payment apps. You can avoid costly errors by making sure you're paying the right person.

Don't give up on using payment apps -- but be smart when using them, so you don't fall victim to a scam that puts your money at risk. You work hard for your money so you want to protect it.

Review our list of best payment apps to learn more about other popular payments apps. For additional financial tips, check out these personal finance resources.