Tip of The Week: Watch Out For Digital Wallet And Convenience Apps

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By Tyler Russell-BBB Northwest & Pacific

We live in the time of convenience. You push a button, download an app or have a digital wallet at your fingertips. Many of these “conveniences” are replacing our checkbook and even debit or credit cards. But are you using these safely? If not, it could put your money and personal information at risk without you even knowing it.

The Better Business Bureau has heard horror stories from across the country. In Detroit, a woman saw roughly $9,000 debited from her checking account. She spotted the trouble when she went online to check her bank statement and immediately alerted the bank. The bank investigated and discovered hackers accessed the woman’s app, resulting in the fraudulent transfers.

Digital wallets link consumer bank accounts, credit cards and debit cards to an app. Scammers are targeting these apps and executing variations on old schemes, including phishing and check-cashing schemes tailored to the new technology.

Loss or theft of the device containing a consumer’s mobile wallet happens, potentially compromising sensitive information. BBB recommends, at a minimum, adding a strong password and using biometric security devices available on some current smartphones.

Another risk involved with these apps or links is that, unlike traditional banking systems, many digital wallet vendors will not shoulder the cost of fraud. This means consumers who have paid scammers using their digital wallet may not be successful in getting the company to reimburse their losses.

Here are some other ways scammers leverage these apps to take your money. In one common scheme, scammers connect a stolen credit card to their digital wallet account. Then, they look for people selling big ticket items on Craigslist or another online service. The scammers offer to pay for the product using their digital wallet. The seller accepts the payment and sends the item but soon discovers the payment sent is not legitimate and the money is removed from his or her account.

It’s important to know that some digital wallet apps take several days to process a transaction. Scammers take advantage of this by setting up transactions and canceling them before they go through. By the time victims realize they’ve never received the money, the scammers are long gone.

Protect yourself when paying with a money transfer app by following these BBB tips:

Use money transfer with friends. Protect yourself from scams by only using money transfer apps for their intended purpose – sending money to people you personally know.

Link your money transfer app to a credit card. As with many other purchases, using a credit card helps protect you if the goods or services you paid for don’t arrive. Linking to a debit card or directly to your bank account does not give you that added protection.

Check your account to be sure the money is transferred. It takes a few days for some digital wallet payments to transfer. If you have any concerns that a payer didn’t really send the money, check your account directly.

The key is being vigilant and knowing what to look for. For more information on this topic and many more, go to bbb.org.

Southwest Check Cashing offers Re-loadable Debit Cards and Direct Deposit for your convenience. Contact us for more information.