Experts say scams involving the money transfer app Zelle are on the rise. Users have reported thieves posing as bank employees contacting them via the app and requesting authorization for payments.
Once a user authorizes a transaction, banks typically won’t do anything to reverse the payment. They argue that if a user willingly authorizes a transfer of funds, they can’t get the money back.
Nearly 18 million Americans lost money to Zelle scams in 2021 alone. So, what should Zelle users look out for when they’re transferring money via the app? Here are some expert tips for avoiding these insidious scams.
If you get an urgent text message or phone call from your bank, don’t panic. Scammers often try to work their victims into a panicked state so they won’t think critically.
Why would your bank need you to send money to a Zelle user? These are questions you don’ tend to ask yourself when you’re scared that the bank is going to close your account.
Take a deep breath and ask a few questions. Why is this happening? Can you speak to someone else about it? Consider visiting the local branch of your bank and talking to people face-to-face to get to the bottom of this. If the person on the other end is still trying to pressure you into transferring money, the odds are good that you’re talking to a criminal.
Experts tell customers to use Zelle the way they would use cash. “Don’t hit the button to send this money unless you would hand this person $100 and walk away, because the moment you send it, it’s gone,” says former bank executive Peter Tapling.
Banks typically won’t refund Zelle charges because victims in these scams authorize the payments themselves. Since scammers aren’t hacking into victims’ phones to steal the money, it falls into a legal gray area that banks say they don’t have to cover.
If you have a Zelle account, link your phone number to it. If you don’t, a scammer might steal your login information and link their own phone number to the account. Then, they can initiate a scam that bypasses your two-factor authentication protection.
These scams look like a user sending themself money – after all, they authorize the payments and enter the authentication code. As such, banks rarely refund money lost to these kinds of scams.