Warning: Venmo Payments From Strangers Can Cost You

Venmo's user agreement says, "personal accounts may not be used to receive business, commercial or merchant transactions."

Venmo — and go.

No need to carry cash or cards these days. The digital wallet app on your phone links to a credit card or bank account, letting you easily send or receive payments.

But some users, like Alex Wilburn, said they got digitally burned.

"This person was very eager to buy the car and I met him right here at the mall," said Alex Wilburn, a Venmo user. 

Wilburn said the buyer who responded to his Craigslist ad for his 2001 Acura sent him $1,800 via the app.

"The way Venmo works is if somebody transfers you money you see it in your account and you think it's there to stay. So we signed the title over drove back to my apartment and actually helped him replace the tags, and then he drove off."

Twelve hours later, Wilburn said he got an email from Venmo saying the payment had been stopped.

"Then I actually saw the money out of the Venmo account reversed and sent back. Yeah, I couldn't believe it."

Neither could Nick, who said he was ripped off by a buyer right before the holidays.

"They said they could only pay through this app called Venmo."

He said he watched the guy transfer $5,400 into his account, right there on the street, for several iPhone 7s he was selling.

"It came into my account, said it was successful. So, I transferred it in front of him into my bank account," said Nick.

But the next day: "I got an email from Venmo saying that the transaction was canceled. I got screwed," Nick said.

Both his money and phones: gone.

"These apps are really, they're breeding grounds for these scammers," said Kelsey Owen, with the Better Business Bureau. "These scammers find something that's popular and they're going to try to work it."

The Better Business Bureau recently posted a warning about scammers using Venmo. Owen said anyone using the app should treat it like a check.

"Really, you need to remember that there is that delay. There are those days in between when the transaction was put in and when they're taking that money from the buyer's account and putting it into yours."

"I called Venmo, they would give me the run around; would not tell me anything," said Nick.

Alex said, "there's no consumer protection. It's all buyer beware."

NBC 5 Responds found that he's right. Josh Criscoe, a Venmo spokesman, said there is no buyer or seller protection, and the app is designed for payments between friends and people who trust each other.

Venmo's user agreement also said, "personal accounts may not be used to receive business, commercial or merchant transactions."

Criscoe added any business usage of Venmo requires an application and explicit authorization.

"Your transactions on Venmo should really be done with people that you can trust and really not even just people that you've met, people that you know that are going to be good for the money," said Owen.

Venmo did tell us it "recently implemented alerts within the app, designed to protect users and discourage activity that violates our user agreement."

Alex Wilburn now wishes he had gone the old fashioned route with cash. He never saw his car again.

"On the bright side it was a really old car that needed to go, and then I guess somebody took it off my hands for free is the way I look at it," said Alex.

If you're going to use Venmo, here's what you should know:

  • Link your Venmo accounts to a credit card instead of a bank account so you have some protections.
  • Also, try to use the app with friends, relatives, people you generally trust.
  • Check your account to be sure the money transferred. It takes a few days for Venmo payments to transfer. Check your bank account to see if the money made it through.

WRC-TV's Scott McFarland contributed to this report.

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