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January 7th, 2023
There once was a time, not so long ago, when you carried folded pieces of paper currency in a wallet just in case you needed to make a quick purchase, or pitch in your share of the tab for a group dinner. Those days are long gone. Electronic payments and online payment services have rendered paper money exchanges all but obsolete. Today, you are more likely to pull out your smartphone and log into a payment app like Zelle, Venmo, or others to split the sushi tab. This convenience is not without its darker side though as it has lead to a rise in Zelle scams.
In this post, we will explore the top scams targeting unsuspecting victims on the popular payment app Zelle and show you how you can steer clear of danger.
What Is Zelle?
Zelle is a modern quick-pay app that allows users to send instant payments back and forth between registered bank accounts. Zelle is valued for its speed and ease of use. Voluntary money transfers can be made almost instantly with just a few clicks.
This is ultra-convenient for sending money between friends or making a quick payment to gain instant access to a product or service. However, this efficiency comes with a steep risk. Users can be tricked into sending funds to a bad actor who disappears with their money the moment the transaction is completed. Because the app is designed for simplicity there are few to no guardrails in place to help protect users from scams.
Can You Get Scammed Through Zelle?
Zelle scams are becoming increasingly common, as the payment platform Zelle continues to gain popularity. Zelle is a convenient and secure way to transfer money between individuals, but criminals have learned how to take advantage of their unsuspecting victims.
Zelle scammers will often request payments for items they never intend on delivering or forge identity documents. If you are ever suspicious about Zelle requests from those you don’t know, be sure to do your due diligence and research before sending the payment. It could save you from losing your hard-earned money.
Is Zelle Safe?
As we touched on briefly above, Zelle is built for speed and convenience, not necessarily safety. Identity verification and layered security add significant time to a transaction, so quick-pay money apps like Zelle are going to need to sacrifice a bit of security in order to offer the speedy transactions that users are looking for.
This means that all quick-pay money apps, Zelle included, require the user to perform their own due diligence to ensure that they are keeping their risk to a minimum. Zelle is no more, and no less safe than any other quick-pay app, but you will need to exercise a degree of caution to keep yourself, and your bank account, as safe as possible while using this app.
What Are Some Common Zelle Scams To Look Out For?
A little bit of knowledge can go a long way toward staying safe when using Zelle, or any other quick-pay platform. So, with that in mind let’s take a look at some of the most common scams currently circulating on Zelle.
Hiring Scams
This insidious scam preys on those who are seeking employment. Scammers create an awesome work-from-home or remote job offer that sounds too enticing to pass up. Scammers are incredibly savvy, so these job offers often sound legitimate, and unsuspecting victims are often lulled by a series of “interviews” that take place via chat or email message exchange. Once the candidate is firmly on the hook, the scammer springs the trap by informing the job seeker that they have passed the interview process and have been chosen for the job.
The job seeker is ecstatic about their new dream job and is often eager to take any final steps needed to get started. The scammer then springs the trap, informing them that they will need to purchase equipment, software, or membership in order to begin working. They will then ask the excited candidate to submit the payment for the purchase through Zelle so that they can start working immediately.
As soon as the payment is submitted, the job offer and the job seeker’s money vanish.
Bank Impersonation Scams
Bank impersonation scams are certainly nothing new. You have likely already heard of phishing and smishing email scams in which scammers create authentic-looking emails purporting to originate from the reader’s bank or credit card company. These emails then alert the customer to a problem with their account and ask them to enter their account details to verify their identity and resolve the issue.
Zelle adds a unique twist to this old game. Because Zelle works by sending money back and forth between users’ bank accounts, scammers are able to trick unsuspecting users with plausible seeming texts referencing a recent Zelle transaction. These messages appear to come from the user’s bank and often ask them to click a link or submit information to confirm or dispute a recent transaction.
Hostile Takeovers
This one is a simple and all too common scam that can occur on any password-protected platform. The scammer may send a phishing text or email asking the user to click through a fraudulent link to then enter their login information, or they may use a ruse to convince the user to reveal their Zelle login information.
After obtaining the login details, and gaining access to the user’s account, the scammer will then change the password and account retrieval information on the account, locking the user out and taking control of the account. Because Zelle accounts are linked to an active bank account, the scammer will be able to use the seized account to transfer funds from the user’s bank account.
How Do You Know If Someone Is Scamming You On Zelle?
There are a few warning signs that you might be dealing with a scammer on Zelle:
- The person you are dealing with is asking you to send them money before you receive the goods or services you are paying for.
- The person’s profile or account seems suspicious or fake.
- You are being asked to send money to an individual rather than a business.
- The person is offering you a deal that seems too good to be true.
- The person is pressuring you to act quickly or threatening you if you do not send the money.
If you encounter any of these red flags, it is best to be cautious and not send any money through Zelle. If you are unsure about whether a transaction is legitimate, you can contact Zelle customer support for assistance.
How NOT To Get Scammed
While these are some of the most common scams they are certainly not the only fraudulent activities taking place on the Zelle platform. Scammers and bad actors are constantly evolving their schemes to trick users out of their cash.
Fortunately, there are several steps that you can take to protect yourself from these bad actors.
Two-Factor Authentication
Enable two-factor authentication on your Zelle account as well as your financial accounts. This may add an extra step to the transaction process, but it will make it much harder for thieves to gain unauthorized access to your account.
Verify, Verify, Verify…
Zelle was initially intended to be used as a tool for sending money back and forth between friends and family members. This is why there are few security features in place. The app assumes that you know and trust the people you are sending money to. Keep this in mind, and limit Zelle transfers to only those people who you trust, or who you are able to positively verify as legitimate through traditional verification channels.
Final Thoughts
Zelle and other quick-pay apps are a great convenience, but they are not without risk. Take the time to know who you are transacting with and stay abreast of the latest scams like those discussed in this post to ensure you don’t become the next Zelle scam victim.
