Venmo, Zelle and Cash App Fraud Draining Bank Accounts, DA Warns

Manhattan DA Alvin Bragg speaks during a press conference. Bragg sent a letter to the CEOs of Zelle, PayPal, and Cash app, demanding that they address the security concerns with their apps that has led to an uptick in theft across New York and elsewhere.

Alarmed by a surge in fraud draining bank accounts through popular mobile payment apps like Venmo, Cash App and Zelle, Manhattan District Attorney Alvin Bragg, Jr., has sent scathing letters to the CEOs of each company, demanding immediate action to protect consumers.

In the letters, Bragg described the crimes as involving an unauthorized user gaining access to unlocked devices, then stealing significant sums of money from bank accounts by making purchases with the mobile payment apps and using financial information from them to open new accounts.

Newsweek reached out to Venmo, Cash App and Zelle via email for comment on Tuesday.

Citing statistics and personal stories of financial hardship, Bragg put the onus on the popular peer-to-peer payment apps to tighten security measures. “No longer is the smartphone itself the most lucrative target for scammers and robbers—it’s the financial apps contained within,” Bragg told Newsweek.

“Thousands or even tens of thousands can be drained from financial accounts in a matter of seconds with just a few taps,” he said to Newsweek. “Without additional protections, customers’ financial and physical safety is being put at risk.”

While Bragg serves as the New York County district attorney, he says the problem is a nationwide issue. “Just in the past year, there have been thefts stretching from Los Angeles, where several people were robbed of thousands of dollars through Venmo at knifepoint, to Orlando, where a woman had thousands drained from her Venmo after a child asked to use her phone,” Bragg said in the letters. “Similar thefts and robberies have been publicly reported in West Virginia, Louisiana, Illinois, Kansas, Tennessee, Virginia and elsewhere across the United States.”

Bragg said that despite the companies’ assurances of safety that they make to their users, instances of theft are rising due to the growing sophistication of the thieves using the apps. “In some instances, the fraudster asks to use an individual’s smartphone for personal use, and then quickly sends large amounts of money to themselves through the victim’s financial application. In other instances, the offender asks for a donation for a specific cause, offers to transfer the money directly from the victim’s smartphone, and then transfers significant funds to the fraudster’s own account,” Bragg said to the CEOs.

He said that in all cases, “further security measures to prevent unauthorized access to unlimited use of your financial services would have prevented such crimes.”

Offering the fintech companies a solution, Bragg recommended a series of measures, including multi-factor authentication, which adds an additional layer of security beyond a simple password. He also suggested imposing default lower limits on daily monetary transfers and requiring wait times and secondary verification for large transactions, giving users time to identify and cancel unauthorized activities.

Bragg has sought meetings with the CEOs of Venmo, Cash App and Zelle to discuss the security concerns, but his office told Newsweek that there were no updates on the meeting requests.

Much like how Apple, the tech giant behind the iPhone, implemented stringent security measures like “Stolen Device Protection,” Bragg said that the peer-to-peer payment companies need to further protect their users by doing the same, adding that a failure to do so will result in more “illegal behavior and countless unsuspecting victims.”

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