In 2017, seven of the biggest banks in the U.S. came together to build the widely used payment platform—Zelle. Little did they know that this app would become one of America’s leading channels for payment fraud.
As of June 2021, there were over 192,800 reported cases of Zelle scams, and only 3,500 of them received a reimbursement from Zelle. Since Zelle claims to have security features in place to help customers protect their money, it begs the question: how do people scam with Zelle?
In this detailed breakdown, we’ll show you how Zelle scams work, what types of scams to avoid, and how to protect yourself from falling victim.
What Do Zelle Scams Look Like?
Zelle scams can take on different formats, but they all have the same goal—to gain access to victims’ financial information or get them to transfer money. They usually come in the form of impersonation, where the scammer pretends to be someone you know to get your account details. In other cases, scammers may offer to sell you something and never deliver it or deliver subpar items.
Scammers take advantage of payment apps like Zelle because of their ease of use and speed—you only need the recipient’s email address or U.S. bank number, and your bank immediately initiates a transfer. There are no delays like with traditional bank payment methods, making it easy for scammers to get your money and disappear fast.
| What Constitutes a Zelle Scam? | Explanation |
| Deceit | The scammer tricked you into processing the payment |
| Authorization | You authorized that the transfer be made from your account |
| Involvement | You made the payment by being knowingly involved in the transaction |
According to Zelle’s policy, it may be difficult to get your money back after scams if you authorized the payment. However, Zelle makes allowances for some qualifying imposter scams, such as when a scammer pretends to be a government or financial organization representative.
5 Popular Zelle Scams To Avoid
Scammers use various tactics to trick people into sending money, and being aware of them will help you stay safe. The most popular Zelle scams include:
- Online marketplace scams
- Social engineering scams
- Romance scams
- Customer support and company rep scams
- Employment scams
Online Marketplace Scams
Imagine seeing a nice bicycle on Facebook Marketplace for a steal price. You reach out to the seller to inquire about the bicycle, and they tell you to pay for it ASAP through Zelle because other interested buyers are bidding for it.
You quickly make the payment, but your bicycle never arrives. When you contact the seller to ask about your delivery, you see they’ve blocked you and realize you’ve been scammed.
This is how Zelle scams typically work on online marketplaces. The scammer offers products they don’t have or counterfeit items. After placing the order, you never receive your package or get fake goods that don’t match the description.
Social Engineering Scams
An example of a social engineering scam may be getting a text from your supposed colleague stranded in an emergency. They ask you to urgently send them money through another person’s Zelle account because they can’t access theirs. To entice you further, they may offer to pay you back double the amount once they can access their money.
Because you trust your colleague and are worried about them, you send the money without verifying their identity, only to find out you were scammed.
Social engineering scams usually involve three techniques:
- Pretexting—Cooking up a convincing story to draw you in and make you trust them
- Baiting—Attaching an irresistible offer to lure you into complying
- Phishing—Pretending to be someone you know to get you to reveal your personal information or take their desired action
These scams work so well because the average person is generally trusting and helpful. The attackers leverage urgency, higher status or authority, or the scarcity of an offer to bait victims and manipulate them.
Romance Scams
Romance scammers prey on victims desperate for affection, usually older folks on dating apps. The scammers’ online profiles only have a few pictures, but they’ll have interests similar to yours to seem like a good match.
Once they get your attention, they’ll excessively flatter you to make you interested and encourage you to start a relationship with them. Their usual excuse for not meeting you in person is that they’re in the military or stuck at a remote job outside the country.
This scam eventually gets to the point where the scammer asks you to send them money, usually for travel or medical expenses. If you arrange a date, the scammer never shows up.
Customer Support and Company Rep Scams
In these types of scams, you get a call or email from someone pretending to be a company’s customer support representative. They usually pose as Zelle or other financial-related companies’ customer support agents. For example, in Taylor Witt’s case, he thought he was speaking to a U.S. Bank rep, only to realize it was a scammer plotting to rob him of $2,500.
The scammers will usually claim that something has gone wrong with your account. They may say that your account was flagged for fraudulent transactions or requires an urgent upgrade or that you’re eligible for a giveaway or a special freebie.
The scam here is that to get access to the fake account recovery, upgrade, or freebie, you’ll either have to provide sensitive information via a malicious link or transfer some money to a fake company account.
Employment Scams
Pretending to be a real company, job scammers put up highly appealing work-from-home offers to entice desperate job seekers. They offer you a job with major benefits and a nice compensation package but ask you to pay an upfront fee through Zelle for training or equipment.
Alternatively, fake recruitment agencies can contact you, offering job placements in lucrative organizations. However, you’ll need to pay them a fee for their services.
Once you pay, the scammers disappear with the money, leaving you without a job.
How To Protect Yourself Against Scams With Zelle
You can protect yourself against Zelle scams by implementing safety practices when using the app for transactions. Here are a few ways to stay safe from scams with Zelle:
- Alert Zelle about fraudulent activities on your account—If you ever fall victim to a Zelle scam or notice unauthorized activities in your account, contact Zelle immediately. If it’s an imposter scam related to government agencies, financial institutions, or existing companies, report the scam by filling out this form
- Only make Zelle transfers to friends and family—Stick to making Zelle transfers only with people you trust. Verify their request if they randomly initiate contact with you, asking for money urgently
- Avoid too-good-to-be-true offers—If it sounds too good, it’s likely a scam. Ridiculously low prices, grand lottery prizes, and attractive jobs that require little training are often scammer bait
- Update your security settings—Beef up your app security levels by using a strong and unique password and activating multi-factor authentication. This will make it harder for unauthorized people to get into your Zelle account
- Allow your app notifications—Enable app or SMS notifications to alert you of the activities that occur within your Zelle and bank accounts. This helps you quickly spot fraudulent transactions so you can cancel them before scammers drain your account
- Transfer savings to a safer account—Your bank account connected to Zelle isn’t the best storage for your savings. If you have large cash reserves or savings, move that money to a high-security banking platform like FortKnox so that hackers or scammers can’t access it
