Virtual wallets, real complaints
How digital payment apps put consumers' cash at risk
A report examining complaints to the Consumer Financial Protection Bureau on digital payment apps, since the CFPB began collecting them in this category three years ago. The key takeaway: Consumers don’t realize these online transfer payments are instantaneous and treated like cash, so when fraud strikes, you’re likely to be left without recourse.
U.S. PIRG Education Fund
Consumers are increasingly using digital payment apps for convenience. The peer-to-peer (P2P) apps were originally marketed as a way for friends to split expenses. But, perhaps due to a concern for contactless payments during a pandemic, consumers are using them for more and more transactions, opening their bank accounts to scammers.
Consumers don’t realize that the instantaneous transactions are not reversible, nor that they have fewer consumer protections when they use a payment app or service. So, complaints are way up. The three most commonly complained-about issues involving digital wallets are problems managing, opening or closing accounts; problems with fraud or scams; and problems with transactions (including unauthorized transactions).