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The popular payback app, Venmo, is reportedly under investigation by the Consumer Finance Protection Bureau over its collection practices, including how it pursues consumers who owe money.
The consumer watchdog agency slapped Venmo’s parent company, PayPal, with a Civil Investigative Demand, according to The Wall Street Journal. The filing is seeking information “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.”
While the CFPB investigation is not a class action lawsuit, Top Class Actions works to keep viewers informed about issues affecting consumers, including potentially questionable debt collection practices.
Venmo Collection Practices Called Into Question
Venmo is an app that allows users to request and exchange money electronically. It has quickly soared in popularity, with active Venmo accounts rising by 32% in 2020, driven by the rise in preference for touchless ways to exchange funds, according to The Verge.
In 2020, consumers used the Venmo app to exchange $47 billion in payments – an increase of 60% from 2019, according to Reuters.
The app appears to instantly transfer money between users; however, it may take up to a day for the “Venmo-ed” funds to leave a consumer’s bank account. During this time, Venmo will cover the amount; however, if the user does not have sufficient funds in their bank account to cover the transfer, Venmo will pursue the debt.
The app has gone after users with debts from $7 to $3,000, telling them that by “not paying, you run the risk of being reported to a collection agency”, according to The Wall Street Journal.
This investigation isn’t the first time Venmo’s collection practices have come under scrutiny. In 2019, the company was accused of pursuing debt collection against those who say they were scam victims. In addition, Venmo has reportedly been criticized for continuing the same collection practices during the coronavirus pandemic.
For its part, PayPal told The Verge that it was working with the CFPB to respond to the agency’s investigation. It reportedly stated that its subsidiary Venmo “remains deeply committed to its compliance obligations and the company works closely with regulators around the world.”
Venmo has also reportedly insisted that its user agreement outlines its collection practices, adding that it stays in line with all state laws when it comes to debt collection.
Have you been subjected to Venmo collection practices? Tell us about your experience in the comment section below.
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123 thoughts onVenmo Collection Practices Under Scrutiny by Consumer Watchdog
My daughter received a payment request from her friend only it turned out to be a scammer impersonating her friend. She sent the money before realizing it was a scam. We called venmo immediately thinking they would and could stop the payment. We were left with no help and vague answers. We then called the bank and froze the account and now venmo wants to send her to collections. Venmo has got to do more for their loyal customers instead of aiding the scammers.
My son was deployed in July and I sent him emergency $300 so he could have some money. It went into my sons old account that he cannot get into and we have been trying to get it back since July. Today I learned about the Amazon Settlement of $150. They sent it to my Venmo and said I didn’t verify my email therefor it was returned. I have logged into Venmo a hundred times and emailed back and forth with Venmo, and they now have $450 that a kid deployed in the Coast Guard, cannot get his money. So how can I now collect the settlement?
I froze my Venmo account back in August 2020 due to fraudulent charges that were incurred. Venmo did reverse the transactions that were done fraudulently, but they turned around and froze my account with $12,000 in it and they will not tell me why they won’t release my funds. This is going on nearly 3 years. Can someone please help? They are committing fraud by keeping my money.
Venmo froze my account and said it was due to fraudulent charges from three years prior. When I asked them to send me information regarding the charges and fees, they sent me some random person’s name as the receiver that I had never even heard of before. I refused to pay them back and disputed it through their customer service as well as the collection agency they sent me to and yet it still sits on my credit to this day and I’m harassed weekly by the collection agency that told me unless I have proof that I don’t know the guy, then it’s accurate and is owed…. I have asked over and over again how I can prove that and/or what do they need for proof of me not knowing him and they have not given me any answers to those questions.
I froze my Venmo account back in August 2020 due to fraudulent charges that were incurred. Venmo did reverse the transactions that were done fraudulently, but they turned around and froze my account with $12,000 in it and they will not tell me why they won’t release my funds. This is going on nearly 3 years. Can someone please help?
Same thing wiyh me single mom . Opened venmo account,recieved payment for my old car that i sold on fb market place. I never recived the money. They froze my account. We have no money no gas no food. Itried to order door dash. That apparantley looks lke fradulant behavior. Someone,Everyone, help me,help us all and let do something. they are taking our money and keepingit till they get good and ready to give it back. if they give it back. There hs to be something we can do to stop these thieves. PLEASE,PLEASE HELP
I just Had Venmo lock my freeze my account with $5200.00 in it.
They came out of the blue and said “Your Venmo account has been frozen due to recent activity that triggered some security alerts.”
I’ve contacted them and so far they have not told me why or what I need to do to get it unfrozen. That was June 12th.
Anyone know what steps I can take?
I wad also scammed. I reported within the hour, provided detailed evidence. No product received, someone was impersonating an officer of the law. Fought it, they decided I owed it, appealed that, they don’t care. Account frozen, don’t know if they’ll send it to collections. Not sure if I should keep fighting or pay and get them off my back. Over 1000 in dispute.
Venmo froze my account with almost 2,000 in it in March 2022, and I provided everything they asked for and they still won’t let me in my account or give me my money back. I got my insurance cancelled n license suspended because of this
I had $1928.00 in my Venmo account & tried to get into my account on March 17th 2022 & it told me that my account was on hold due to me verifying my identity.So I email I believe on a safe,secure link my Texas state ID front & back,ended up doing this a total of five times for them & all my results so far is that my account is now frozen & I must wait for a “specialist” to get back to me,via email & here iam still waiting…my name is Kristy Scheel and my email is kscheel422@gmail.com I give you my email because I’ve already been data breached from Equifax & just got a letter in the mail stating that my vital information has been breached in my medical accounts.
Upon signing up for venmo I had a few memo transactions then my account was blocked so I called them they said that they had to verify my identity I had to upload a photo of myself a photo of my California ID along with the date and then both pictures of myself holding my ID card next to me I was required to email it to them I email it they clear it I have a balance of $600 and say $7 they blocked my account again happened to repeat the same process that cleared me the first time to clear my identity it was ongoing thing and I still to this day can’t get into my account and they won’t tell me why