Zelle® Fraud and Scams: What to know.

Zelle® Fraud and Scams: What to know.

In today’s world, everyone wants a fast, simple, and secure way to send money to friends and family. Zelle® has quickly become one of the most prominent peer-to-peer digital payments platforms used by Americans. Its popularity soared with consumers because of its ease of use and its price tag, free. In 2021, Zelle® reported over 1.8 billion transactions from its users and is expected to keep growing. But is it really as safe from fraud and scams as it seems to be?

There has been a lot of buzz around Zelle® lately with claims of fraud and scams being committed across the country. It has been a topic on multiple news networks and publications. Recently, Sen. Warren’s office issued a report on Zelle® fraud and scams stating, “Fraud and theft are rampant on Zelle® – and are increasing.” Is this truly the case? Let’s take a closer look.


Information on Zelle® Fraud and Scams

In a statement released by Early Warning Services (The Zelle Network Operator®), “Tens of millions of consumers use Zelle® without incident, with more than 99.9% of the payments completed without any report of fraud or scam.” That is 99.9% of 5 billion transactions completed safely and securely. The Bank Policy Institute (BPI) recently published a report with data showing that Zelle® is one of the safest ways for consumers to transfer money among peer-to-peer digital payment platforms, with lower fraud and scam rates than other apps.

The question now is how can you avoid falling victim to digital payment fraud or scams. First, let’s define the difference between a scam and fraud. In both cases, an impersonator is requesting information or payment from you. The difference is an authorization.


The Difference Between Fraud and Scams

Fraud is an unauthorized payment not initiated by the consumer. An example of fraud would be an impersonator calling to get personal information to access your account. Scamming is an authorized payment. An example of a scam would be someone calling to demand payment for a service, like an electric company, providing you with credentials to make your payment. How can you avoid these types of fraud or scams?



Tips to Avoid Falling Victim

Always be vigilant when reading your emails, and texts, or answering phone calls. If something doesn’t seem right, it probably isn’t. In the case of someone requesting information pretending to be from a trusted institution, hang up and call the institution’s number. If it is a legitimate request from that institution, they should be able to verify their inquiry.

Don’t give out personal information over text or email. These systems can be manipulated to collect consumer data. Your financial institution or any reputable organization will not ask for this information over the phone, text, or email.

Avoid clicking suspicious links. These links could redirect you to an untrustworthy landing page that could be used to collect your sensitive data or drop malware onto your device.

Sign up for banking alerts for your accounts. These alerts will help you monitor and spot any suspicious account activity. It is important to act fast so you can secure your account.


What To Do If You Have Fallen Victim

If you believe you have fallen victim to fraud or a scam you should notify your financial institution immediately and begin the process of securing your account. It may also benefit you to report the incident to the Federal Trade Commission (FTC) so they can help the local authorities investigate your case.
Fraud and scams are an unfortunate part of our reality. Fraudsters and scammers are finding new and more innovative ways to extract data and payments from consumers. The good news is you can avoid all of that by following these tips and staying vigilant.

 

For more security tips, visit our Security Center linked here.

 

To learn more about Zelle® and the reports cited in this article, view the links below.

 

Bank Policy Institute, “Online Fraud is Real, But Zelle is a Safe Harbor, Not the Problem”

Bank Policy Institute, “The Data Shows that Zelle Is the Safest Way for Consumers to Move Their Money.”

American Bankers Association, “ABA, BPI, CBA, and TCH Statement on Sen. Warren’s Zelle Report”

 

 

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