Zelle Payment Fraud on the Rise: What You Must Know

Zelle Payment Fraud on the Rise: What You Must Know

Posted by Financial Strategies Group in Blog Posts, Cyber Security 29 Nov 2022

Peer-to-peer payment apps have made splitting dinner among friends quick and easy. With a few clicks, you send money from your bank account to a friend’s bank account all from the dinner table. However, with the ease that new technology brings, scams typically follow.

Zelle, a peer-to-peer payment (P2P) app, was created by the banking industry in response to the popular Venmo and Cash App used by consumers to transfer money easily to friends and family. Since Zelle was created by many of the most popular banks and is automatically available to customers, it has now become the most popular P2P app on the market.

With only an email address or phone number, funds can be transferred to another account. The money is sent instantly and can’t easily be reversed. This has made the app a vehicle for scammers to steal money from unsuspecting consumers.

A new Senate report has found that over 190,000 cases of Zelle fraud have been reported—costing consumers $213 million last year. The report also found that the banks only reimbursed consumers in about 3,500 of the

190,000 cases.


What is Zelle fraud?

Most Zelle scams begin with a text message. In some cases, it will ask a user to confirm a fake Zelle payment. When the recipient says they did not make the purchase, the scammer will call pretending to be the bank and walk the victim through the steps of reversing the charge. In actuality, however, the money is being transferred to the scammer’s account.

In another common fraud, scammers impersonate a utility company. Victims receive an urgent message that their power will be shut off imminently without payment. They are instructed to send a Zelle payment but the money really goes to a scammer.


How can you protect yourself?

If you have a Zelle account, be on the lookout for suspicious messages. It is unlikely that your bank will contact you via text or email and ask for a Zelle payment. If you receive a message and are unsure, call your bank directly and ask. The same goes for utility companies or any other business that reaches out with unsolicited messages.

Only use Zelle or any P2P app to transfer money to people or companies you know and trust.

If you do fall victim to a scam, contact your bank immediately. If they refuse to reimburse you, contact the Consumer Financial Protection Bureau. The CFPB is expected to issue regulations on this matter that would require banks to reimburse customers.of 2015, so it now includes the crypto firms to report cyberthreats they face. Due to cryptocurrency’s growing issues like cyber-attacks, high volatility, and inflation, have pushed global lawmakers to cover crypto in proper legislation

This material was prepared by Horsesmouth.