Zelle Scams: How Scammers Trick You Using Payment Apps

Most people have heard of and used Venmo, but probably few people having heard of Zelle, which is another popular digital “payment platform.” Zelle, if you’re not a user, is offered by hundreds of banks and people who have linked Zelle to a checking account can give or receive cash to others quickly and easily. The person you’re sending cash might be a scammer. It’s fast and convenient, and maybe too much so. Fact is, people should pause just a second when they make a transaction using Zelle, because the person they’re sending cash to might be a scammer. How’s that? Because there are scams popping up where the con artists encourage their victim to pay them using Zelle, instead of cash, credit card or even wire (which many people still do.) More so, there’s one version that involves the scammer pretending to be an employee of your bank, who tricks you into using Zelle to supposedly thwart fraud…and then scams you in the process! More on that later. As it turns out (as with most things in life) there is a right way and a risky way to use payment platforms, including Zelle. Think about this. You probably would only loan your car people you know and trust. If a relative stranger asked to borrow your car, you’d surely say ‘no!” That’s how you should think of Zelle. Keep it close to home and close to the vest, for good reason! But first, let’s learn a bit more information about Zelle. Zelle is a payment platform, all digital, that is offered by hundreds of banks across the United States.By linking your checking account to your bank’s Zelle service, you can quickly pay anyone else who has a Zelle account by sending them cash “digitally” and instantly, using your phone or other device. They can send you cash the same way. The Zelle transaction puts the money right into the checking account linked to Zelle. (Once you’re done reading this article, see if your bank offers Zelle. It’s free and easy to set up.) Everyone likes Zelle because sending and receiving money is fast, easy and free.  Not coincidentally, those are the same reasons why scammers like Zelle so much. And that’s where a problem has started. So, why has the phrase “Zelle scam” become heard in the news? It’s simply because scammers have turned to Zelle transactions to do their dirty deeds—they get their rewards instantly. If you authorize sending payment to a Zelle user, that money is paid immediately. There’s no getting it back or reversing the transaction. So, it’s not that Zelle has a flaw at all. Its’ simply so convenient scammers want you to 1) fall for their scam and 2) give them money using Zelle. That’s why we said there’s not a Zelle scam; rather, there are scammers who love Zelle. And here’s the tough news—Zelle transactions aren’t covered or protected like credit card transactions are. That’s one of the reasons this topic is getting covered in the press. Consumers are complaining—even though they’re the ones falling for the scams. That’s why this topic is important for you to know and think about. Zelle is more like a cash transaction than a credit card transaction, so how you hand out money using Zelle is serious business. It also means you should think twice before using Zelle, not because it’s risky, but simply because it is so convenient. To simply avoid being fooled by a scammer, you should limit your use of Zelle to friends, family members or people you know and trust – same as you (should) do to avoid Venmo scams . Set that as your personal standard and litmus test for whether or not to use Zelle. Safe uses of Zelle: family and friends In the examples below, Zelle is the simplest easiest way to pay or receive digital cash from someone you know for a good reason that makes sense. Risky Zelle transactions: People you don’t know well and shouldn’t trust In the scenarios below, you’re being encouraged to use Zelle by someone you don’t really know, for a transaction that’s a little out of the ordinary: There are also instances of banking “impersonation scams” where the scammer tells its victim that they need to use Zelle to “reverse” a fraudulent transaction. The Zelle platform has been linked to a scam where thieves pretending to be bank employees call the bank customer’s with a complex, but successful scam. In short, the scammers talk victims into using Zelle to make a payment to themselves. The scam works not because Zelle is involved (again, there’s nothing wrong with Zelle), but because scammers scare their victims into paying money. Here’s how it might unfold: The worst part is you think you’ve been working with your bank to avoid fraud! Ironically, as it turns out, you made the scammer’s lie come true. You lost $1,000. There’s no way your bank can reverse a transaction you authorized. There’s something important to keep in mind: There’s nothing unsafe about using Zelle and there’s nothing wrong with Zelle. If you make clear usage rules for yourself about using Zelle—and share them with friends and family you care about—you’ll enjoy all the convenience that it has to offer…safely. On the Easy Prey podcast, hosted by Chris Parker, you can hear interviews with expert guests on a variety of topics, including scams regarding mobile payments. To see all the available topics, go to your favorite podcast platform and search for the Easy Prey podcast. You can also find a link to all episodes at the link below.