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Legal Complaint Against Venmo Challenges Anti-Muslim Discrimination

This is the first U.S. case against Venmo’s policy of targeting transactions on the basis of religion and ethnicity.

The Venmo logo is seen displayed on an Android mobile phone.

No one should have to justify what they ate for lunch and why after dining out with friends, just because they are Muslim, Arab or South Asian. But that’s the sad reality for many New Yorkers who are regularly singled out when they make payments, and the reason why our organization, the Council on American-Islamic Relations, New York (CAIR-NY), is representing Brooklyn native and community organizer Shahana Hanif in a discrimination complaint against payment processor Venmo before the New York City Commission on Human Rights, filed on July 21. The types of restrictions placed on certain transactions amount to profiling, lead to embarrassing social stigmas, and are an unacceptable and discriminatory barrier for whole groups of people to enjoy the same access to services as others.

The case is the first in the nation to challenge Venmo’s policy of targeting transactions on the basis of religion (Islam) and ethnicity. We bring this case to force Venmo to change its policy and to be transparent about how it filters and reviews transactions. Venmo will also serve as a warning to others in the financial sector that we will not allow them to escape responsibility for their unlawful conduct.

Our complaint against Venmo stemmed from a lunch that Hanif had with friends in late 2019 at the Al-Aqsa Restaurant in the Bronx. Hanif, of Bangladeshi descent, is also a candidate to become the first Muslim woman and South Asian on the New York City Council. As often happens at lunch, one person covered the bill and the others paid her back. But when Hanif tried to send $14 to her friend over Venmo, mentioning “Al-Aqsa” in her description of the payment, the transaction was flagged and restricted.

She was contacted by Venmo, demanding she explain the purpose of the payment and provide a “complete and detailed explanation” of what she purchased and where. Hanif provided details but felt embarrassed, singled out and unwelcome, wondering why she had to justify getting lunch.

“Al-Aqsa” happens to be associated with the Al-Aqsa Mosque, one of the holiest sites in Islam, located in Jerusalem. Venmo ultimately approved the transaction after a delay. It appears Venmo maintains a generalized policy of pausing transactions with certain terms for administrative review without looking at the context or location of the users. This practice has a disparate impact on those belonging to certain races or religions and is thus discriminatory in its nature and denies equal access to whole communities.

Experiences like that of Hanif are not isolated incidents. When she shared her experience on Twitter, many people quickly reported similar experiences of having transactions blocked for payments, ranging from a ticket for a Syrian play to, ridiculously, a gelato flavor called “Syrian lemonade.” This trend facing Muslims and those of Middle Eastern or South Asian descent became so prevalent that Newsweek conducted an investigation into Venmo last year. Newsweek discovered that transactions mentioning Persian restaurants were regularly flagged, while transactions mentioning “Cuba sanctions” or “North Korea food” were not. The advocacy group MPower Change also conducted its own investigation, and found that terms surrounding Middle Eastern or Muslim terms were flagged but terms like “KKK” or “cocaine,” which both violate Venmo’s terms of service, were not.

Such regimes are discriminatory and overbroad. They create a reality where some individuals are forced to go through additional steps purely based on their perceived identity. If the police did the same — subjecting certain people to additional scrutiny and questioning just because of certain generalized terms or associations with a certain race or religion — that would be obviously unconstitutional. In New York City, special laws require businesses to provide their services to New Yorkers on equal footing and with equal access. Why then are payment processors allowed to flag payments in a discriminatory manner?

Venmo is not the first financial entity to have these problems. “Banking while Muslim” is a trend impacting American Muslims regularly that goes back to passage of the USA Patriot Act. Financial institutions regularly single out American Muslims for discriminatory treatment. In one case filed last year with the Commission on Human Rights by CAIR-NY, a hijab-wearing woman who tried to open a savings account at Citibank was rebuffed without explanation when she tried to open a new account after she mentioned her husband’s Arabic surname. In another case filed in federal court, Citibank shutdown down, without reason or explanation, bank and credit accounts of a Muslim customer. CAIR-NY has documented many similar instances of “banking while Muslim” where accounts are closed because of the account holder’s ethnicity or religious background.

In April, numerous members of Congress even sent a letter to federal financial regulators and three banks calling on them to address disparities and difficulties experienced by individuals, businesses and charities. “Banking as a charity/nonprofit and ‘banking while Muslim’ are not crimes and must stop being treated as such,” they wrote. “We are therefore advocating for a more inclusive financial system, and we reject the notion that there is a binary choice between creating financial inclusion and protecting our financial system from abuse by illicit actors.”

The Congresspersons cited LaunchGood, a crowdfunding platform focused on serving the Muslim community, which raised half a million dollars for coronavirus relief alone, and was warned by WePay and Chase Bank that the platform would be cut off from service because it was perceived to be high risk. The Congresspersons noted that despite internal policies and due diligence, LaunchGood was unfairly targeted for discrimination based on the community it serves.

In other cases, bank accounts held by Muslims, or even those simply perceived to be Muslim, have been closed.

Unfortunately, this issue is only growing. Ultimately these trends make whole communities feel unwelcome in an unacceptable way. Hanif, we hope, will not have to have a transaction blocked and justify herself the next time she wants to enjoy a Bangladeshi meal out with friends.

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