A group of lawmakers have forwarded correspondence to PayPal President and CEO Dan Schulman, advocating fraud protection for Venmo users patronizing the platform.
U.S. Sens. Sherrod Brown, chairman of the Senate Banking, Housing, and Urban Affairs Committee, Jack Reed (D-RI), Bob Menendez (D-NJ), and Elizabeth Warren (D-MA) signed off on the letter stemming from reports of widespread fraud and scams on Venmo, the peer‑to‑peer instant payments platform owned by PayPal.
Additionally, the legislators wrote to Cash App CEO Brian Grassadonia, expressing similar concerns over the company’s ability to keep customers’ money safe.
“We write in response to reports of widespread fraud and scams on Venmo, a peer‑to‑peer (P2P) instant payments platform that is owned by PayPal,” the legislators wrote to Schulman. “We seek to understand how Venmo has allowed fraud and scams to proliferate on its platform and the steps that Venmo takes to keep users’ money safe.”
The lawmakers assert PayPal has not taken sufficient steps to protect consumers from the harm that its services have enabled, citing the company’s annual report noting although peer-to-peer payment services serve an attractive target for third parties to engage in abusive schemes or fraud attacks, the company’s risk management policies and procedures may not be effective in detecting and preventing fraud.
Within the correspondence the lawmakers requested information from PayPal that included the total number of transactions reported by customers as fraudulently induced, and the total dollar value of the transactions; the total number of cases where Venmo provided refunds to customers who reported fraudulently induced transactions, and the total dollar value of these refunds; and the total number of cases where Venmo provided refunds to customers who reported unauthorized transactions and the total dollar value of the refunds.