Beware Scammers and the Mobile Payment Loophole

ABC News Fixer helps Deadhead after ticket scheme.

— -- Matthew Ascaridis, a longtime Grateful Dead fan, purchased tickets to their farewell concert series in Chicago. When his wife’s feet couldn’t take the last night of dancing, Matt decided to sell his tickets – and found an online buyer offering $1,800 for his tickets via the Chase QuickPay cell phone app. Matt handed over the tickets to the buyer, only to find that three days later, the money transfer had been cancelled due to insufficient funds in the buyer’s account.

Matt decided to call the ABC News Fixer. Read Matt’s original letter to the Fixer below, and see how she got Matt his $1,800. Also, see what tips the Fixer has for you to keep your money safe when you use mobile payment apps.

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Dear ABC News Fixer: I sold a pair of tickets on Craigslist to the last Grateful Dead show ever for $1,800.

The buyer asked if I would accept Chase QuickPay because it was a Sunday and he couldn’t get that much cash from an ATM. Before we did the transaction, I called Chase’s customer service line to make sure this would go all right.

I was told that the only way I wouldn’t get my money is if I were to decline the funds. The customer service person also said a QuickPay transfer can’t be initiated if the person doesn’t have enough funds in their account.

Once I received the QuickPay email from the buyer on my mobile phone, I accepted the funds and handed over the tickets.

Three days later, I got an alert from Chase stating that the transaction had been cancelled due to insufficient funds. I called Chase and they said I should have waited until the funds cleared and that it wasn’t their responsibility.

I asked how this could have happened, as I had been told that the buyer couldn’t use QuickPay unless he had sufficient funds in his account. After four hours on the phone, they said the executive branch would look into it. Three days later, they said I was out of luck.

- Matthew Ascaridis, Highland Park, Ill.

It’s no wonder you had numerous responses to your Craiglist ad.

Too bad the buyer you chose was a thief who had figured out how to exploit a facet of these popular mobile payment apps to steal your money.

You told the ABC News Fixer that you and your wife were lucky to score tickets for the Friday, Saturday and Sunday shows of the Dead’s “Fare Thee Well” tour. Even better, the tickets were for the general admission “pit” up front, where you stood just 20 feet from guitarist Bob Weir. Wow! But all that standing – from the time the gates opened in the afternoon until the shows ended some seven hours later on Friday and Saturday nights -- took a toll on your wife’s tired feet. You decided to sell the Sunday night tickets.

That’s when you met your thief. We found out later that the same guy scammed at least four other people who were either selling concert tickets or trying to buy advance tickets that he claimed to be selling.

The scammer apparently exploited the fact that Chase QuickPay – like many of its competitor services – is not an instantaneous transaction. It’s in the QuickPay fine print that there’s a time lag before the money actually exists in your account. This can take several days, especially when the money is coming from an outside bank.

This guy must have had the funds in his account to start the QuickPay transaction, but then the moment he got your tickets he took the money back out of his account and let the transaction bounce.

The thing that bothered us was that you were a longtime Chase customer who had tried to do your due diligence and call Chase’s customer service before you accepted the mobile payment. You said you told the customer service rep that you were selling tickets. In a perfect world, the rep would have thought to tell you, “Wait! Don’t give the person the tickets for at least a few days!”

We went to Chase and asked them to take another look. They did, and to their credit they decided to make a goodwill gesture and put the full $1,800 back in your account.

And with that, your very long, strange trip finally got fixed!

As for the rest of us, mobile payments are here to stay – they’re easy and don’t involve checks and paper – but we need to be careful. Here’s some advice:

  • Remember that even though the mobile payment app says the funds are available in your account, the transaction isn’t finished until it clears both banks. This could take several days. Don’t spend the money right away because if the transaction bounces, you’ll be on the hook for those funds.
  • Read the fine print in the payment app’s terms and conditions. It might save you from surprises later.
  • If you’re selling something to a stranger, hang on to the tickets or the item until the transaction has completely cleared. Or just insist they pay in cash.
  • - The ABC News Fixer