Many individuals use cash-sharing apps like Venmo and PayPal to send and receive money. This convenience also makes them appealing targets for scammers.

Although the holiday shopping season has ended, scammers are still finding ways to deceive people and steal their money, often relying on popular cash-sharing apps like Venmo and PayPal.

According to the U.S. Federal Trade Commission, fraudsters often buy people’s usernames and passwords when there is an online data breach. They then attempt to use these credentials to access cash-sharing app accounts, where money might be stored.

Jenny Groberg, CEO and founder of BookSmarts Accounting and Bookkeeping explains that hackers sometimes use technology to guess passwords. “The technology can cycle through possible passwords in minutes,” Groberg told Scripps News. “It can use your login or ID to try different passwords, increasing the likelihood it will crack your password.”

In some cases of suspected fraud, the companies operating these apps may alert you to reset your passwords. However, scammers may call from untraceable numbers to trick you into entering the security reset code before you can respond.

This form of fraud has become more common, with the FBI noting a significant increase. Reported online fraud cases have almost doubled since 2019, with losses reaching $12.5 billion last year alone.

The 2023 FBI Internet Crime Report highlights a 175% increase in scams involving tech support impersonation. To protect your money, the Federal Trade Commission recommends enabling two-step authentication on cash-sharing accounts, ensuring that your login cannot be changed without a unique code sent directly to you.

Cash-sharing apps like PayPal and Venmo advise customers never to share this code with anyone, even if they are contacted directly. Companies caution against falling for messages claiming to be from their customer service or tech support, a warning also issued by the Better Business Bureau (BBB).

“It’s an old-fashioned impersonation scam,” said Melanie McGovern, spokesperson for the BBB. “They use the names of big companies and apps we use every day to trick customers into giving up information.”

McGovern adds, “It’s essential to verify: ‘Did I sign up for these alerts?’ Understanding what’s normal for the app can help you stay safe.”