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- Scammers use Zelle and other payment apps because transactions are quick and hard to track.
- If you get scammed on Zelle, it will be difficult to get your money back.
- Be wary of urgent payment requests, text messages containing links, and unsolicited overpayments.
Scammers have turned to peer-to-peer (P2P) payment networks like Zelle to con people out of their money. If you fall victim to a Zelle scam, it can be more challenging to recover your lost money than if you were a victim of outright fraud.
Here's what you should know about Zelle scams so you can protect yourself while using the payment app.
How Zelle scams work
A scam occurs when a person or company tries to deceive you into directly giving them money or sharing personal information so they can access it.
John Breyault, vice president of public, telecommunications, and fraud at the National Consumer League, says scammers take advantage of new payment technologies as they emerge. According to Breyault, scammers have now moved onto Zelle and other payment apps for three main reasons:
- Money sent through payment apps is available quickly after being sent.
- The money is difficult to get back due to regulation.
- Scammers can remain out of reach of law enforcement by setting up dummy accounts or using other tactics.
Overview of Zelle policies
Zelle works differently from other P2P payment apps because it's partnered with credit unions and banks. You can use your bank's mobile app or online banking platform to make a payment via Zelle or download the Zelle app.
"For many consumers, that creates an impression, incorrectly, that the same kind of protections they get for other transfers through their bank, they're going to get on Zelle. That's not true," Breyault says.
Alexis Castorina, senior director of consumer education at Zelle, says payments on Zelle should be treated like sending cash.
"Zelle does not offer a protection program for authorized payments. Once you authorize a payment to be sent with Zelle, you can't cancel it if the recipient is already enrolled because money is going directly into that recipient's bank account within minutes," Castorina says.
As a result, when you have fallen for a scam, the Zelle website says you must contact your financial institution for help.
How banks view Zelle scams
Reporting a scam allows your financial institution to review your situation and freeze accounts if necessary. However, it's unlikely you'll get your money back.
"What we hear all too often from consumers is they do the right thing — call their bank. They report it. The bank says, 'Sorry, there's nothing we can do,'" Breyault says.
Banks will refer to Regulation E, also known as the Electronic Funds Transfers Act, which covers customer protections regarding money transfers — but only for unauthorized transactions. If you willingly hit send, it will usually be considered an authorized transaction. You likely won't get your money back.
Lauren Saunders, associate director at the National Consumer Law Center, says if someone hacked into your account and took your money, you are protected under the law. "You should insist to your bank that it was an unauthorized charge and that they should reverse it," says Saunders.
Common types of Zelle scams
Fake buyer
Facebook Marketplace is a common setting for Zelle scams targeting sellers of second-hand goods. An alleged buyer may respond to a post asking if the item is still available. They may also inquire about details of the item that are clearly outlined in the original posting (a sign that the message is a copy-and-paste job or written by AI).
They will then ask for your phone number or email address to send a payment for the item, even before seeing it in person. The link they send appears to be from Zelle, but it is actually a phishing link. You may be prompted to sign up for a Zelle business account, which requires an upfront payment, allowing the scammers to access your bank information.
Phishing and impersonation
Sophisticated scammers can spoof phone numbers to impersonate banks or Zelle. Posing as the financial institution, they send text messages to customers notifying them of "suspicious activity" on their account. The texts may request personal information, such as a bank account number or log in, for verification, or ask the customer to send a payment via Zelle to reverse the allegedly fraudulent transaction.
In another variation, scammers call customers directly, posing as a financial institution and warning them of suspicious activity on their account. They ask the customer to follow specific instructions to protect their funds, which can include transferring money to a Zelle account purportedly belonging to the customer, but actually belonging to the scammer.
Overpayment and advance payment
In overpayment scams, a Zelle customer may receive a large amount of money, unprompted. The sender reaches out, claiming it was a mistake and asking the recipient to refund all or part of the payment. As soon as they do, the scammer cancels their initial payment, leaving the customer in the red.
Protecting yourself from Zelle scams
Recognizing red flags
Scammers may try to fool you by using skillful tactics, but be mindful of these four red flags if you're sending money to someone:
- A person insisting on being paid only through a payment app
- A person tries to rush you into making a quick payment
- A person telling you that your account has been hacked and you need to share information to protect it
- A bank calls you and tells you to send money through Zelle
In these situations, it's best to pause contact or hang up the call to determine whether the information you're receiving is correct.
Secure practices for using Zelle
Castorina says Zelle should only be used to send and receive payment with people you know and trust. If you're using Zelle to send money to someone you don't know, always be cautious.
Here are a few tips on how to use Zelle and other payment apps safely:
- Verify you have the recipient by sending a small amount of money first and ask the person to make sure they received it
- Use only home Wi-Fi or your cellular connection to avoid security gaps in public Wi-Fi
- Be mindful of what you share on social media, so scammers don't know details about your personal life
- Never share personal or bank information via email or text, even with someone purporting to be from your bank or credit union
- Only share personal information over the phone with your bank if you initiated the call
- Sign up for alerts or multi-factor authentication for extra security
Quick tip: Zelle and most financial institutions have their own email domains (not Gmail, Yahoo, or AOL). Before clicking a link in an email from Zelle, double check that the email address contains @Zellepay.com. The company says it's the only domain extension it uses.
What to do if you fall victim to a Zelle scam
If you've fallen for a scam on Zelle or another payment app, Breyault recommends reporting it.
"People don't like to admit that they've been a victim of these scams because they're often blamed for it. They often blame themselves," Breyault says. "While reporting it may not result in you getting your money back, what it does is help law enforcement, identify trends, and help protect other consumers."
Follow these steps:
Contact your bank
The first thing you can do upon realizing that you've been in a scam is call your bank or credit union. Your financial institution can investigate the situation further and freeze bank accounts if you've been hacked. You may also request that the money be returned, though it's unlikely to happen if you authorized the payment — even under false pretenses.
"They might at least pass the information on, which hopefully would trigger the receiving bank into looking into it," Saunders says.
Report it to law enforcement
After contacting your bank, you can file a police report on the scammer. In most circumstances, there will be a division or phone hotline dedicated to reporting fraud.
Law enforcement can also report this information to your state attorney general. The state attorney general can review your report to identify illegal activity.
Additional resources
You may refer to the following government agencies to file additional reports or learn more about your rights:
- Consumer Financial Protection Bureau: The Consumer Financial Protection Bureau has educational resources on many topics involving scams. For example, you can learn about elder financial exploitation and phishing.
- Federal Trade Commission: You could file a report with the Federal Trade Commission. Reports are shared with 3,000 law enforcers throughout the US.
- FBI Internet Crime Complaint Center: The FBI Internet Crime Complaint Center looks into all online crimes. You may file a complaint through the center if you or someone you know has fallen for an online scam involving certain types of transactions.
FAQs
A Zelle scam is when a customer is tricked into sending money via the Zelle payment app. Unlike fraud, they have authorized the payment often under false pretenses.
Common red flags include urgent requests for money or personal information, unprompted payments, and text messages or emails that appear to be from your financial institution flagging suspicious account activity.
If you suspect an email, text message, or phone call you have received is part of a scam, pause communications and report the incident directly to your bank and Zelle. Only use phone numbers provided on the website, not those written in texts or emails.
If you authorized a Zelle payment that you later realized was part of a scam, it may be challenging to recover your money. Zelle recommends contacting your bank immediately to see what options you have. If you used the Zelle app, rather than your bank app, report the scam.
Protect yourself from Zelle scams by only sending money to people you know and have verified are expecting your payment; using secure Wi-Fi networks; not responding to large, unsolicited payments; and never sharing personal or bank information via email or text or over the phone unless you initiated the call.
