Zelle Scams Are On the Rise—How to Spot Fraud and Ways to Keep Your Finances Safe
Plus, what to do if you have experienced fraud through Zelle
Sending money to other people has never been easier. Whether paying for goods and services or sending money to someone for a special occasion, Venmo, CashApp and Zelle can transfer your money in minutes. However, these platforms also give way to fraud and theft. With Zelle scams on the rise, keeping your finances safe is more important than ever. Keep reading to hear from experts about how to spot fraud and tips to protect your money.
How does Zelle work?
Zelle is a peer-to-peer transfer service that enables people to send and receive money via an app by using a phone number, username or email, explains Elizabeth Ayoola, a personal finance expert at NerdWallet. It’s a convenient way to send money because it’s fast and free.
“The Zelle network connects more than 2,200 bank and credit union brands of all sizes, enabling consumers and businesses to send digital payments to people and businesses they know and trust with an eligible bank account in the U.S.,” adds Denise Leonhard, general manager of Zelle.” Money is available directly in bank accounts within minutes when the recipient is already enrolled with Zelle.”
Common Zelle scams
Lately, scams have been on the rise, and sending money over Zelle is no exception. That’s because Abhishek Karnik, head of threat research at McAfee, points out that online scam trends tend to follow consumer purchasing trends.
“Right now, one hot transaction spot is peer-to-peer platforms like Zelle,” Karnik says. “Because money is transferred instantly (and irreversibly) on these platforms, they’re ripe for exploitation by scammers, who can delete their accounts and instantly disappear after receiving ill-gotten payments.” Here, common zelle scams to look out for:
Account takeover Zelle scams
“Account takeovers happen“when the criminal hacks your Zelle or bank account,” says Avoola. “They usually change your password and lock you out to transfer the money to themselves.”
Scammers need login information to access your account, which they can do through fraudulent emails, texts or calls posing as your bank account. If you’ve had the same password for the past year or tend to keep your login details somewhere that’s easily accessible, Avoola recommends taking more secure measures to keep yourself safe.
Impersonation Zelle scams
It’s easy to fall for an impersonation scam because scammers pretend to be someone you know. Avoola says they may pose as a family member, romantic interest or financial institution hoping to catch you in a vulnerable moment so they can request funds. She suggests confirming with the person trying to make the request before accepting.
Fake invoice Zelle scams
Karnik notes that fraudulent activity regarding pay statements or invoices can occur via email. One example is an email saying that someone has deposited money in their Zelle (or other P2P payment) account.
“The recipient is prompted to click a link to go directly to the app, but instead, the malicious link downloads malware onto the person’s phone or computer,” says Karnik. “The scammer can then glean personal information from the scam victim’s devices.” To avoid this type of scam, consider adding extra security software to your phone or computer.
Fraudulent seller Zelle scams
“This scam targets an unassuming buyer who sends money through a peer-to-peer app to purchase an item from a seller they connected with online,” Karnik says. The seller casually suggests to the buyer, “Just Venmo or Zelle me.” The buyer sends the money, but the item is never received, and the seller vanishes. Karnik says this scam is frequent in online marketplaces, trading sites and apps.
How to avoid Zelle scams
It’s important to keep your finances safe, especially when sending money or making a purchase. Easy ways to protect yourself:
- Only send money to people you know and trust. “The best way to ensure that you are keeping yourself and your money safe is to never send money to a stranger whose identity you can’t verify,” says Leonhard.
- Add extra protection with biometrics, 2-factor authentication and text alerts. Karnik says in addition to a strong password, users should set up their app to use a PIN, facial ID, or fingerprint ID to provide an extra layer of protection in the event their phone is stolen or lost and someone tries to make a payment with it.
- Confirm your recipient’s contact information. “Ensure you have the correct U.S. mobile phone number or email address for the person you want to send money to,” says Leonhard. It’s easy to double-check to avoid fraud.
What to do if you fall victim to a Zelle scam
While it may feel embarrassing to fall for a scam, these instances can happen to anyone. If you are scammed, Avoola says the most important step is to report the scam to Zelle support as soon as you notice suspicious activity. You can also report fraud to your financial institution or the Federal Trade Commission (FTC).
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