Venmo, Zelle and Cash App are leaving customers vulnerable to theft, a top District Attorney has said

Manhattan District Attorney Alvin Bragg accused the instant payment apps of putting customers at risk of fraud which is ‘draining bank accounts of significant sums of money.’

Bragg sent letters to the popular apps demanding that they increase protections – including imposing limits on the amount of money that Americans are able to send via the apps.

His warning came in response to a ‘growing number of incidents’ in the New York City area – but noted that thefts were sweeping across the US.

‘No longer is the smartphone itself the most lucrative target for scammers and robbers – it’s the financial apps contained within,’ Bragg said in a statement. ‘Thousands or even tens of thousands can be drained from financial accounts in a matter of seconds with just a few taps.’

These crimes involve an unauthorized user gaining access to unlocked devices and then draining bank accounts of significant sums of money, making purchases with mobile financial applications, and using financial information from the applications to open new accounts,’ the letters read.

Bragg said that criminals can steal and trick their way into victims’ locked cell phones – and in some cases theft can even turn violent.

‘In the most disturbing cases, offenders have violently assaulted or drugged victims, and either compelled them to provide a password for a device or used biometric ID to open the victim’s phone before transferring money once the individual is incapacitated,’ he added.

The use of peer-to-peer payment services has grown exponentially over the past five years, nearing almost $1 trillion in payments across the most popular apps.

As use of these services has become ubiquitous, the District Attorney said, scams have proliferated.

Fraud claims tripled between 2020 and 2022, costing consumers hundreds of millions of dollars each year.

‘Two taps and someone’s life savings could be gone,’ Bragg said in an interview with ABC News.

Bragg noted that while these payment apps allow users to transfer funds quickly and easily, they have also become a favorite of fraudsters as people often have no option to cancel a transaction, even moments after it is authorized.

He asked for tighter security measures, including multi-factor authentication, lowering the limit on daily transfers, requiring a wait time on transfers of larger amounts and better monitoring of suspicious activity.  

According to the Consumer Financial Protection Bureau, Americans should be able to get their funds back if they are a victim of fraudulent electronic transfers.

But a 2022 investigation by Senator Elizabeth Warren – which focused mainly on Zelle – found that customers often struggle to reclaim lost funds.

Just in the past year, Bragg said, there have been thefts stretching from Los Angeles, where several people were robbed of thousands of dollars through Venmo at knife point, to Orlando, where a woman had thousands drained from her Venmo after a child asked to use her phone.

Similar thefts and robberies have been publicly reported in West Virginia, Louisiana, Illinois, Kansas, Tennessee, Virginia and elsewhere across the country.

The District Attorney noted how Apple has recently introduced a new feature designed to stop thieves from accessing smartphones with passcodes.

‘Stolen Device Protection,’ promises to prevent cyber-criminals from locking iPhone users out of their Apple accounts or accessing any of their passwords stored in Apple’s Keychain.

If the feature detects an unknown location of the iPhone, it will require Apple’s FaceID to unlock the device – making it harder for perpetrators to use a phone’s passcode to steal funds when the user’s phone is not at home or at work.

A spokesperson from Venmo’s parent company PayPal said the companies take the safety of their customers seriously.

A Zelle spokesperson told panafrican.email: ‘We are aware of isolated criminal incidents described in the Manhattan District Attorney’s letter.

‘As a result of our continued efforts to build on Zelle’s strong foundation of security, less than one tenth of one percent of transactions are reported as fraud or scams, and that percentage keeps getting smaller.’

Cash App said that it works to mitigate fraud through a combination of preventative controls like multi-factor authentication, account transaction limits, fraud detection, and consumer education.

‘We also partner with law enforcement agencies to detect and combat criminal activity,’ a spokesperson added.