5 Zelle Scams To Look Out for and How To Protect Yourself

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Zelle is a convenient way of sending money straight from your bank account to another U.S. bank account in just minutes. If you want to send your money to your nephew for his birthday, you don’t need to know his bank account number or where he banks. All you need to transfer money from your account to his account is his mobile phone number or email address. An even better feature, Zelle doesn’t charge a fee.

Zelle is a subsidiary of Early Warning Services, LLC, which is a fintech company jointly owned by seven major U.S. banks. And it has become a popular service — according to the company, consumers and businesses sent 1.8 billion payments worth $490 billion through Zelle in 2021. Nearly 10,000 financial institutions participate with Zelle.

Can you get scammed with Zelle? In a review of the service, Forbes said Zelle is “generally considered a safe, secure way to send money because it doesn’t require the sender and recipient to share anything other than a phone number or email address.” But read on to learn just how safe your money really is when Zelle is involved.

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Be on the Lookout for Scams

Despite Zelle’s safeguards, scams can occur, and as a consumer, you should watch for suspicious activities like these five common scams:

1. The Fake Puppy Scam

Bad news: there’s no puppy. During the pandemic, a woman decided a dog could boost the spirits of her family and fell in love with “Lilly,” a puppy she saw advertised online. It turns out there was no Lilly, which she learned after sending almost $4,000 via Zelle in a series of payments that she thought were for the dog, a pressurized crate and insurance, consumer group Elliott Advocacy shared.

How To Protect Yourself

The fake puppy — or other fake pet — is a common scam. Don’t send money to anyone without first meeting the pet in person — or at least use a payment method with purchase protection, like a credit card.

2. The Pretend Text or Email From Your Bank

A scam could start with a text popping up on your mobile phone, purportedly by your bank seeking to confirm that you made a specific transaction and asking you to respond “yes” or “no” about whether it’s legitimate.

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“Most Zelle scams are rather simplistic: You might receive a text about a transfer of money that you, quite obviously, did not authorize,” said Monica Eaton-Cardone, the founder of Chargebacks911, which helps to combat fraud. “The scammer waits for you to respond, poses as a representative of your bank, and then tricks you into disclosing enough personal and financial information to successfully transfer your funds.”

How To Protect Yourself

Experts recommend never clicking a link in a text message or email. Call your bank directly instead to determine whether your bank account has been compromised.

3. The Fake Fraud Department Call

A New Jersey woman shared with NJ.com how she was scammed out of $1,000 when she received a call from someone who claimed to be from her bank’s fraud prevention department questioning a pending transaction. A call can look and sound legitimate, even down to your caller ID showing a genuine contact name and number for your financial institution.

“He said in order to stop the charge before it went through, I would have to access my PNC Zelle app to reverse the unauthorized transaction,” she said. “He gave me a code to enter, and he told me to enter my first and last name and type ‘reversal’ on the Zelle memo.”

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Despite her suspicions, she did it. And lost her money.

How To Protect Yourself

Never provide personal information or follow the instructions of someone who calls you — instead, call your bank directly so you know for sure who you’re talking to.

4. The Fake Utility Company Call

In April 2022, a woman living in a Cleveland suburb shared her Zelle scam story with a local television station, describing the call she received from her purported utility company that said she had 30 minutes to pay her bill before her power would be cut off. The man she spoke with knew the details of her account — including her address and the balance due — and told her to send the money via Zelle.

She told News5 in Cleveland that the caller instructed her how to transfer the amount due, $295.64, but the first attempt encountered a glitch. So did the second and third tries, she was told, and then he gave her a security code for the fourth effort. Money was deducted all four times, with almost $1,200 going to the scammer’s account and not the utility company’s.

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How To Protect Yourself

Only make payments to your utility company — or any other bills — directly to your provider, through your account.

5. The Fake Job Scam

A California woman told ABC7 television in San Francisco that she was delighted to find a new work-from-home job with a reputable healthcare company that would allow her to continue to care for her aging parents. Her hiring manager sent her a $1,900 check to buy computer equipment she needed, and once she deposited the check, she was to pay for the gear by sending the money to two Zelle contacts provided.

She did, but it turns out the person wasn’t a hiring manager, there wasn’t a job with the company, the check bounced and she overdrew her account. She didn’t receive any equipment and became another victim of a Zelle scam.

How To Protect Yourself

No matter how good it sounds, a job that requires you to pay anything from your own account — even if they send a check to cover it — to get started is probably fake. Best to move on to another opportunity. You can also research the job and employer. If the job is on a third-party site but not listed on the company site, it probably doesn’t exist.

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Can You Get Money Back From Zelle if Scammed?

According to Early Warning Services, if someone accesses your account and conducts a Zelle transaction without your knowledge, that’s a fraud. Because you didn’t authorize the activity, you should get your money back.

However, if you are aware of the transaction and authorized a payment to be sent, that’s a scam. And the company says that even though you’re a victim who was tricked, you’re probably out of luck when it comes to getting your money back because you gave the okay.

In any case where you’re suspicious about a Zelle transaction, contact your financial institution immediately.

In July, a group of U.S. senators urged the Consumer Financial Protection Bureau to work to do more to “protect consumers and hold banks accountable for fraud conducted using bank-owned instant digital payment networks like Zelle,” the office of Sen. Bob Menendez, a New Jersey Democrat, said.

How Do You Avoid Zelle Scams?

You might think the threat of a scam is a reason why you should not use Zelle, but it can be used safely if you watch for red flags. Ben Alvarado, the executive vice president and director of core banking at California Bank & Trust, offered these tips to avoid being a victim of a scam.

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Using Zelle is a convenient way to send money to people you know. But think twice about sending it to people you’ve never met or to people who contact you to demand payment via Zelle. Take all precautions to keep yourself from falling victim to a scam.

Information is accurate as of Nov. 23, 2022.

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