This is my Professional Guide on How to Protect Your Money and Bank Account from Zelle Scams in the United States. We all know that moving funds via the peer-to-peer service is quite easy and very popular among fraudsters. Sometimes a Zelle scam can start with a call, email or text message that appears to be a representative from your bank or utility company.
What is Zelle? Fast, Safe & Easy way to Send and Receive Money
According to Wikipedia, Zelle is a United States–based digital payments network owned by Early Warning Services, LLC. It is a privately owned financial services company owned by the banks including Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo. Zelle® is a fast, safe and easy way to send and receive money with friends, family and others you trust. Look for Zelle in your banking app to get begin your transaction. Simply register for Zelle, login to your account and do transfer.
In addition, Zelle is a person-to-person payment service offered by major U.S. banks as an option to nonbank P2P services, like PayPal or Venmo. Zelle is electronic, convenient, safe, secure and usually free if you have a savings account.
With all these benefits, combined with Zelle’s instant and irreversible transactions make the service popular not only with customers, but also scammers, who have reportedly used Zelle to steal thousands of dollars from customer’s bank accounts.
What is Zelle Scams?
According to cnet.com zelle scam is a common scam involves an email or text message asking you to confirm either a small or large, fake Zelle payment. Now, when you reply that you didn’t authorize the transfer in the first place, the scammer follows up by calling you and pretending to represent your bank. They will spoof the bank’s/financial institution’s phone number to make you believe the call is actually from the bank.
They will try to convince you with different lies about your account names, address or date of birth, then go ahead to ask you of your password or PIN. If you give it to them, they will use the information to transfer money from your account. You can take a look at the FedEx Text Scam Alert 2022 Updates: Fake Delivery Notifications SMS & Email for more.
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How Does Zelle Work in Your Bank App?
To start with, Zelle is very easy to use. To send funds, all you need is to log in to your bank’s mobile app, access the integrated Zelle features, and then enter the amount you want to transfer and the recipient’s phone number or email address, and with a flash, the transaction is completed.
Recipients who enrol in Zelle transaction option receive the funds in a matter of minutes, while those who are not on the platform receive a notification that explains how to collect the funds.
Nevertheless, many commercial banks have incorporated Zelle into their online mobile application services. In any case, if your bank does not have Zelle, you can access the service by downloading the Zelle app and enrolling with your debit card.
How Do Scammers Use Zelle to Steal Money?
Typically a scammer calls, emails or sends you a text message that appears to be from your regular commercial bank.
The message says your bank is trying to confirm that you made a Zelle transaction for a specified amount. The utility company message states that your utility is yet to receive your payment and will turn off your power shortly except you immediately make payments via Zelle.
Your contact [phone number] “spoofing” can make the fake calls appear to be legitimate on your phone’s caller identification.
When you eventually try to contact the phone number to dispute the transaction, your call will seem to connect to your commercial bank or utility company. You will then tell you to make a Zelle transfer, supposedly “to have the funds paid bank to your account.” This transaction as against your wish, will in fact transfer your money to the scammer. In either case, if your bank requests an authorization code to complete the transaction, the scammer will in turn ask you for that code immediately.
Fake romances, crypto-currency, suspiciously cheap concert tickets or even sales of purebred puppies are also avenues one can get a Zelle scam alert.
How Do You Protect Yourself From Zelle Scammers?
The most reliable and safest way to protect yourself from Zelle scams is to never make use the service to send money to unfamiliar people.
“Consumers can and should continue to use Zelle, but be careful that they are sending the money to the right person,” says Erik M. Baskin, founder and financial planner at Baskin Financial Planning in Cheyenne, Wyoming.
If someone contacts you and asks you to send funds to them with Zelle right away, don’t respond. Instead, call your bank on what you know to be a legitimate phone number and ask a bank representative to review recent activity on your account.
Be suspicious of requests from people you don’t know, especially if the situation is showing as “very urgent” with a short deadline and frightening consequences. Never share your two-factor authentication passcode with anyone.
Alex Rezzo, founder and financial planner at Andante Financial, an investment advisory firm in Los Angeles, advises his clients to use the recipient’s email address instead of a phone number when they are sending funds with Zelle.
“Typos are easier to spot within an email address than within digits in a phone number,” Rezzo says.
Another tip is to transfer $1 and confirm verbally that your intended recipient received the payment before you send a large amount. This practice, Rezzo says, “is a good backstop against opportunities for error.”
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What Do You Do If You’ve Been Zelle Scammed?
If you’ve been scammed with Zelle, you should contact your bank and report the loss of funds as soon as possible.
Some banks reportedly have refused to offer refunds because the federal law protecting consumers from the theft of their funds applies only to “unauthorized” transactions.
In December 2021, the Consumer Financial Protection Bureau issued guidance to clarify that fraudulent P2P transactions are considered unauthorized. This is because they were initiated by someone other than the consumer and the consumer received no benefit.
The CFPB also stated that banks cannot consider consumer negligence as a factor or claim that consumers waived their protections in their bank account agreement.
If you’ve been scammed with Zelle and your bank refuses to return your funds, you can file a complaint with the CFPB, which forwards consumers’ complaints to financial institutions to respond.
The bottom line?
Baskin says, “Zelle remains one of the most efficient ways to send money today. It just needs to be used in a responsible manner with caution.” You can also look through these similar articles below;
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Common Zelle Scams to Watch Out For
What are some common Zelle scams to look out for?
- Impersonation scam
- Romance scam
- Phishing scam
- Fake invoice scam
- Lottery scam
- Zelle Facebook Marketplace Scam
- Goods and Services Scam
- Emergency Phone Scam
- Religious Scam
Editorial Note: This content is not provided by Zelle Banking Company. Any or all opinions, analyses, reviews, ratings or recommendations in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Zelle. Lastly, the sole purpose is to guide users.