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Beware of the Zelle Scam!

Zelle Scam Pic StampOutScams Zelle Scam Blog Post

What is Zelle?

Launched in June 2017, Zelle is a peer-to-peer, some­times called P2P, pay­ment ser­vice. Zelle is so easy to use, which makes it very attrac­tive to users.…and to scam­mers. Zelle is accessed eas­i­ly through a phone or small device app. It allows users too eas­i­ly and instant­ly trans­fer mon­ey to oth­er Zelle reg­is­tered users. It is used many users to pay­back friends or fam­i­ly, pay rent, receive rent, pay bills or just about any­thing else that requires the trans­fer of funds.

Zelle is owned by Ear­ly Warn­ing Ser­vices. Believe it or not, Ear­ly Warn­ing ser­vices is a con­sor­tium of major Unit­ed States banks, includ­ing Bank of Amer­i­ca, Chase, Cap­i­tal One and Wells Far­go. Whether bank cus­tomers know it or not, Zelle is avail­able to over 100 mil­lion bank­ing cus­tomers. How­ev­er, bank­ing cus­tomers need to “BEWARE OF THE ZELLE SCAM!”

What is the Zelle scam?

The Zelle scam tar­gets cur­rent users of the Zelle bank­ing app. The report­ed Zelle scams con­sist of manip­u­lat­ing peo­ple with fraud­u­lent infor­ma­tion and scare tac­tics. Scam­mers use false claims and rep­re­sen­ta­tions to get peo­ple to unknow­ing­ly autho­rize mon­ey trans­fers. A com­mon scam starts with an email or text mes­sage ask­ing a user to con­firm a large, fake Zelle pay­ment. This is what is called an atten­tion get­ter. When the user replies that they did­n’t autho­rize the trans­fer, the scam­mer fol­lows up with a phone call pre­tend­ing to rep­re­sent the bank. The scam­mer will use a free app to spoof the finan­cial insti­tu­tion’s phone num­ber.

The scam­mer walks the caller through bogus instruc­tions on how to reverse the unau­tho­rized claims. Of course, this step actu­al­ly results in trans­fer­ring mon­ey to the crim­i­nals. The scam­mer gets the Zelle user to pro­vide them with the two-fac­tor authen­ti­ca­tion code sent to them by Zelle. Once they receive that code, they can access Zelle and change the bank­ing infor­ma­tion to their own infor­ma­tion. In oth­er words, instead of you bank receiv­ing funds, the scam­mers bank will now receive funds. They then direct funds from your account, to theirs.

Scammers pose as utility representatives

Along with mas­querad­ing as your bank, scam­mers might also pose as insti­tu­tions such as util­i­ty com­pa­nies. Numer­ous vic­tims have report­ed fac­ing threats of ser­vice dis­con­nec­tion from some­one pos­ing as a rep­re­sen­ta­tive from an elec­tric com­pa­ny. Of course the scam­mer request Zelle pay­ments from the vic­tim to keep the pow­er on. The vic­tims are not in dan­ger with the util­i­ty com­pa­nies , but are scared into believ­ing they are. Out of fear, the send over mon­ey to the scam­mer via Zelle. The scam­mer then dis­ap­pears with their hard-earned funds.

Scam­mers may not lim­it them­selves to being util­i­ty rep­re­sen­ta­tives. Scam­mers are oppor­tunists. So any ven­dor that requires pay­ments is a poten­tial breed­ing ground for scam­mers. One thing to note, legit­i­mate util­i­ties or ven­dors rarely call their cus­tomers for pay­ments. They usu­al­ly send notices demand­ing pay­ment or some­thing neg­a­tive will occur; like a util­i­ty shut­off. So if you do get a call, be sus­pi­cious or just hang-up.

Steps to avoid the Zelle scam

 There are some com­mon sense steps you can take to avoid the Zelle Scam. Fol­low the below steps to avoid being duped by Zelle scam­mers:

  • Num­ber one is don’t respond to unso­licit­ed text mes­sages or e‑mails. A lot of scams start out this way, so best to avoid them at all costs.
  • Keep an eye out for new recip­i­ents who have urgent dead­lines or requests. Anoth­er com­mon trait among most scams is a sense of urgency.
  • Nev­er, ever give any­one your two-fac­tor authen­ti­ca­tion code. Once you set up this two fac­tor code, keep it to your­self. Also, banks will nev­er call you for that code. Peri­od!
  • Use Zelle only for trans­fers to friends, fam­i­ly or busi­ness­es you know or trust. Remem­ber, if you make a pay­ment with Zelle, you may not be able to recov­er the mon­ey from the bank.
  • If you are some vic­tim­ized by a Zelle scam­mer, call your bank imme­di­ate­ly. Inform them of the scam, how much you lost and request a reim­burse­ment of funds lost. If they refuse to refund your mon­ey, look to the next sec­tion for guid­ance.

Banks refusing to refund money lost to Zelle Scammers!

So, here is one of the more real­ly impor­tant parts to remem­ber about the Zelle scam. Prob­a­bly one of the parts that moti­vates scam­mers to keep per­pe­trat­ing this scam. Of course, one of the first things you should do if you think you have fall­en prey to the Zelle scam, is call your finan­cial insti­tu­tion. Because a Zelle trans­ac­tion is instan­ta­neous, you will want to call imme­di­ate­ly after you become aware of the trans­ac­tion.

How­ev­er, accord­ing to many reports, banks have been reluc­tant to reim­burse loss­es from Zelle scams. The banks argu­ment is that since the trans­ac­tions were actu­al­ly approved by the account hold­ers. This alleged cus­tomer approval comes when the cus­tomer naive­ly gives the scam­mer the two-fac­tor authen­ti­ca­tion code.

Banks refusing to refund lost funds: Call the press!

Here are a cou­ple tips to fol­low if your bank refus­es to return funds lost because of a Zelle scam. These tips are impor­tant, because many Zelle scam vic­tims have report­ed a pat­tern of refusal to reim­burse their loss­es as a result of the Zelle scam. Banks are hang­ing their hats on the false argu­ment that because the cus­tomer autho­rized the Zelle trans­ac­tion, they are not on the hook for reim­burse­ment of the funds. Com­plete­ly ignor­ing the fact that the cus­tomer was tricked into send­ing the funds through Zelle. It is this lack of sup­port from the banks and the imme­di­an­cy of Zelle, that has made it a savory scam for fraud­sters. This is exact­ly why Zelle scams are sky­rock­et­ing.

As men­tioned pre­vi­ous­ly, there are a cou­ple of tips for con­sumers if a bank refus­es to refund mon­ey lost from a Zelle scam. Many Zelle vic­tims who have been denied reim­burse­ment by banks have indi­cat­ed that it was only after con­tact­ing their local news chan­nel, that some­thing hap­pened. Spe­cif­ic news reports on the banks refusal to reim­burse a named cus­tomer, for some­thing that is obvi­ous­ly fraud, has led to a quick change of heart on the banks part. Noth­ing like bad press to cause a bank to change their minds.

Banks refusing to refund lost funds: Cite Regulation E!

Here is anoth­er excel­lent ref­er­ence tip for con­sumers when fight­ing with a bank who refus­es to reim­burse mon­ey lost from a Zelle scam. Go ahead and cite them what is known as Reg­u­la­tion E. In June 2021, the Con­sumer Finan­cial Pro­tec­tion Bureau clar­i­fied its posi­tion on banks required com­pli­ance with the Elec­tron­ic Fund Trans­fer Act of 1978. This act is known as Reg­u­la­tion E. The banks were bas­ing a lot of their argu­ment against reim­burs­ing cus­tomers on the word­ing of this Reg­u­la­tion.

For­tu­nate­ly for con­sumers, the Con­sumer Finan­cial Pro­tec­tion Bureau now states that “if a third par­ty fraud­u­lent­ly induces a con­sumer into shar­ing account access infor­ma­tion, that con­sumer should receive the same pro­tec­tions as if the mon­ey were acquired from a stolen deb­it card or oth­er bank­ing access device.

Well, just why is this clar­i­fi­ca­tion so impor­tant? Well it takes away the bank’s argu­ment that because the cus­tomer gave out their two-fac­tor authen­ti­ca­tion code, they were not liable for reim­burse­ment. The elec­tron­ic trans­fer act gives con­sumers a big rea­son to report Zelle scams imme­di­ate­ly. The law requires con­sumers to noti­fy their banks of loss or theft with­in two busi­ness days to receive full pro­tec­tion.

It is impor­tant to note that this guid­ance only pro­tects con­sumers who are unwit­ting­ly tricked into trans­fer­ring mon­ey as part of the Zelle scam. If at this point the bank refus­es to reim­burse your mon­ey from a Zelle scam, you can tell them you will be fil­ing a com­plaint with the Con­sumer Fina­cial Pro­tec­tion Bureau. After hang­ing up with the bank, you should imme­di­ate­ly file your com­plaint.

For guide­lines on where to report the scam, vis­it Zelle­pay. They offer guid­ance on where to report Zelle scams or attempt­ed scams.

Watch a breakdown of Zelle Scam on our YouTube channel

Exact­ly how the Zelle finan­cial app can be exploit­ed is a mys­tery too many. It seems impos­si­ble that scam­mers could find a way to involve this app in a scam. Well, give the scam­mers time and they will fig­ure it out. For a video break­down of how the Zelle app, and oth­er finan­cial scams, are used by scam­mers vis­it our YouTube chan­nel. We have cre­at­ed a video specif­i­cal­ly describ­ing how the Zelle app scam is imple­ment­ed.


If there is one thing to learn from this blog post, it is be care­ful and use com­mon sense when uti­liz­ing the Zelle app. You can be scammed almost instant­ly by a Zelle scam­mer. Zelle is a pop­u­lar bank­ing app, used by a lot of finan­cial insti­tu­tions and their cus­tomers. So the pool of would-be vic­tims is huge!

There is a lot of addi­tion­al infor­ma­tion on the Zelle scam. An excel­lent resource rel­a­tive to the Zelle scam, and numer­ous oth­er scams, is the AARP Fraud Watch Net­work. It is a fan­tas­tic resource and free to use. They have a fan­tas­tic pod­cast on their “The Per­fect Scam” week­ly pod­cast. They have a full pod­cast devot­ed to the Zelle scam.

Just remem­ber to use com­mon sense when­ev­er you feel like you’re about to be scammed. Stop, take a breathe, and ask your­self if this feels right. If it does­n’t pass the “gut-check” then move quick­ly away from the sit­u­a­tion.

One of my favorite, quick easy tools to use is a Google check. If I think some­thing might be a scam, I type in the top­ic, for exam­ple, Zelle, fol­lowed by the word scam. If there is a scam involv­ing Zelle, or any oth­er top­ic, and the word scam is includ­ed in the search results, there is most like­ly a scam some­where in the world involv­ing that top­ic. Some­one has tak­en the time to write some­thing that ends up in search results that includes your top­ic and the word scam. Prob­a­bly bad news!



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