Don’t fall for this Zelle scam
- 💲💲 New warnings are being issued after scammers intensify their attacks via the money transfer app Zelle.
- 😮 These are particularly dangerous scams, because banks often will not cover any fraudulent payments.
- 😡 A New Jersey college student was among the latest victims, as scam artists drained his bank account of the $2,000, he had saved for tuition.
What to look out for
Typically, the scam begins with a text message or an email purportedly from your bank and warning you of a potentially fraudulent charge or saying your account has been compromised. These are commonly referred to as "fishing scams."
Once you call the number given or click on the link, you are hooked.
In order to secure your account, you will be told to use the peer-to-peer money transfer site to send money to yourself.
Once you do, the scammers have your information, and can add themselves as a payee and drain your account.
It is not just financial institutions that are being impersonated
Scammers are getting more creative in terms of how they dupe people. Utilities, cable companies, college loans, auto lenders, and other common billers have been the subject of fishing scams.
In nearly every case, once you respond to the bogus inquiry, a scammer will follow that up with a phone call, pretending to be a representative of the biller, they will then try and guide you through the process of transferring money.
What is being done?
In almost every case of Zelle fraud, banks will refuse to reimburse you for your losses. They argue that they were not "unauthorized transfers," since you did technically authorize it - even though it was a scam.
Zelle was created by some of the nation's biggest banks, including JPMorgan Chase, Wells Fargo and Bank of America. The Wall Street Journal reports those banks are now collaborating on a uniform way to protect Zelle users and potentially construct a uniform framework for refunding customers for "illegitimate transfers."
As the number of victims skyrocket, the banks have been under intense political pressure to do something about it.
U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking, Housing, and Urban Affairs Committee, has been among the most vocal critics of Zelle.
In October, Menendez was joined by victims of Zelle scams at a news conference in Jersey City. He warned if the banks did not come up with their own remedy, he would pressure the Consumer Financial Protection Bureau to hold banks accountable.
"The big banks are racking up billions of dollars in profits every year and all we are asking is that they treat their consumers fairly," Menendez said, "It is time for the banks to revise their existing policies, end the confusion, and make consumers whole when they are defrauded on the banks’ own platform."
Eric Scott is the senior political director and anchor for New Jersey 101.5. You can reach him at email@example.com
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