In the News
Fraudulent charges are rampant among digital payment services. In Venmo lost millions from fake payments this year, Shannon Liao at The Verge discusses the reality of fraudulent charges on payment services like Venmo and how they may continue to cause financial trouble for the company’s future. Liao explains that Venmo typically trusts the consumer’s word in fraud charges and repays the consumer for their expected losses, even though this financially harms the company. Liao furthers that Venmo is changing some of its features such as instant payment and transfers as well as banning potentially problematic users from its platform to mitigate fraud.
Our Take
Much like with Venmo’s parent company, PayPal, the idea of trusting the word of a consumer in the case of fraud charges is an act of support for consumers in a digital industry where much of the transaction occurs without face-to-face contact and has become common among online payment vendors. Even though this potentially harms the company financially, users can develop a greater sense of trust in a given company and proceed to utilize their services with the reassurance that they will not experience financial losses. This policy is highly beneficial and should be seen by consumers as a safeguard against malicious attackers in the digital community. However, not all companies support and implement this protocol, which may spell trouble for individual finances if you are caught up in a fraudulent transaction. Whenever possible, use payment services that protect consumers in the event of fraud and make sure to be careful when making digital payments, always verifying your source before you make a transaction.
Recommendations
How can you protect your information while using digital payment platforms?
- Understand the risks of putting your personal and financial information into the world, and only share what you have to
- Only participate in a transaction from reputable and trusted sources
- Minimize the number of accounts that have direct access to your bank account or card numbers
- Track your finances closely to notice suspicious transactions before they become dangerous
- Report fraud charges or suspicious activity immediately
- Stay up to date on the news regarding recent data breaches and security flaws to see if you may have been affected