Venmo requires identity verification.
Let's talk about privacy before we move on to the next topic. Venmo identity verification because Venmo can be very complicated.
As mentioned earlier, it is required by federal laws, the USA Patriot Act. It requires financial institutions, including payment apps, to create a Customer Identification Program to verify the identities and transactions of customers. This is done to stop terrorist funds from moving through financial apps and also to detect and stop money laundering.
Venmo requires identity verification to prevent fraudsters from using the app. Venmo will need to verify the identity of each user to make sure that fraudsters cannot use the app to steal money. Venmo can help you report scammers to authorities if they take your money via a fake product listing scam.
Both of these are great reasons. Let's now look at the negative.
The Downside of Identity Verification
Venmo's access to personal information can have the negative effect of increasing data exposure through a data breach. A non-profit organization specializing in identity theft reports that there were 1,862 data breaches by Venmo in 2021. This is an all-time high. Venmo, which holds consumers' personally identifiable data, is a prime target for data breaches.
Venmo has not been implicated in any data breaches so far. This is a positive sign. However, it doesn't rule out the possibility that a data breach could occur in the future. While we don't discourage you from going through the verification process ourselves, we aren't encouraging you to do so.
Venmo: Is your information secure?
It all boils down to this: Do you trust Venmo with personal information? These are the key points about information storage and security that we found in Venmo's privacy policies.
Venmo stores personal data on third-party servers in the United States.
Although the details of these safeguards are not known, they protect stored information.
Venmo uses firewalls, encryption and physical access controls to restrict access to data.
Venmo will notify affected users if it discovers a breach of data.
These seem to be sound security practices, and Venmo says it conforms to applicable U.S. state and federal regulations.
It is worth noting, however, that PayPal, the owner of Venmo, settled charges with Federal Trade Commission in 2018. 5 One of these charges was related to Venmo's security practices. In particular, Venmo misrepresented having a "bank-grade security system." FTC claimed that Venmo did not have an information security program in place until August 2014. Venmo also failed to notify users about password and address changes until March 2015. Venmo was required by the FTC to submit to third-party compliance audits for the next ten years following the settlement.
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