How Zelle scams work and how to protect your money

Burdun Iliya/

Zelle is one of the most popular financial platforms of its kind, so it’s no surprise that the platform has become a target for scammers. Here’s what to watch out for and how to avoid a nasty surprise.

What is Zelle?

Zelle is a peer-to-peer (P2P) payment service which makes it easy to send money from one bank account to another. The service is (at the time of writing) only available in the US, having been set up by some of the largest financial institutions in the country.

The fact that Zelle charges users no fees for sending money has seen the service gain huge popularity over the past few years. All you need to use it is a bank account with a participating financial institution and the Zelle app for iPhone Where android. Some banking apps already integrate Zelle, making it especially easy to send or receive money online.

Zelle’s accessibility and growth as a service means it’s easy to set up and use, but it’s also attracted scammers. Fortunately, most scams that target Zelle users aren’t new and should be easy to spot.

Zelle scammers use fake text messages and calls

Zelle scams rely primarily on social engineering, where a scammer builds trust so that the target sends money willingly. Similar scams have plagued banks and legacy payment services like PayPal for years.

One of the most common scams starts with a fake text message asking for approval of a pending transaction or issuing a warning about fraudulent activity on an account. When users interact with the message (usually returning “no” as instructed), they receive a phone call from what appears to be a legitimate financial organization. Scammers can spoof phone numbers so that the number calling appears to be a bank or credit union.

From there, the scam takes a turn. The targets are informed that a thief is trying to empty their bank account and that they must transfer money to their account to be safe. Ideal targets aren’t already using Zelle, which offers potential scammers the ability to link their bank accounts to a target’s phone number. To do this, the scammer will guide the target through the two-factor authentication process and ask them to read the verification code sent to the victim’s phone.

With the victim’s phone number attached to the fraudster’s account, the scammer will then initiate the final stage of the scam: getting the victim to send money to their own phone number. Since the phone number is now associated with the scammer, the money finally leaves the target’s account. Scammers will often try the same trick multiple times, requesting repeat transactions to “recover” lost funds.

The scam mainly affects those who are not yet using Zelle, who are inexperienced with technology and who think there is no way to send money to their personal phone number could play into the hands of a crook.

Online sellers can also be victims

In another example of a scam using Zelle, TikTok user Tarek Ali (@itstarekali) was also scammed using a fake email. The social media user explained how he had listed photo material on Facebook Marketplace after which someone started inquiring about the article. The supposed buyer demanded that the videos look legit and requested that an additional lens be included for a total of $770.

The scammer sent a fake confirmation email to Zelle, stating that Tarik had received the money. Instead of checking to see if the money was credited to their account, Tarik unsuspectingly sent the camera to the buyer. They then asked for additional payment for shipping costs. The scammer sent another follow-up email claiming that Tarik was unable to receive money due to his “personal” account.


#green screen I deserve it 😂😂😂 because why didn’t I check my Zelle

♬ original sound – Tarek Ali

The scammer claimed he should send an additional $400 to Tarik, which then needs to be sent back to “upgrade” the account. Looking up the contact in their Zelle account, Tarik noticed that the supposed buyer was not listed. Tarik then carefully checked their “confirmation email” payment summary and noticed that it was from a webmail provider posing as Zelle, rather than Zelle itself.

The scam is older than time, but with more users participating in the peer-to-peer payment economy than ever before, there are more potential victims than ever before. It’s a scam that happens daily on Facebook Marketplace, and it’s one of the reasons why you should ideally only sell items to local, in-person buyers on Facebook.

RELATED: 10 Facebook Marketplace Scams to Watch Out For

Never pay an “overdue bill” using Zelle

Zelle is an online payment system, so it’s open to most other forms of scams that plague these services. One of the most popular schemes among fraudsters is to demand payment of utility bills and other unpaid charges. Zelle was used for this purpose, as were iTunes gift cards.

There’s a simple rule you can follow to avoid disappointment: if a company tracks down an unpaid payment using a peer-to-peer payment service like Zelle or Venmo, you’re being targeted by a scammer.

A scam text message to Netflix

Some companies let you pay bills using a service like PayPal, but most offer multiple payment methods. If you ever suspect foul play when a business is looking for an invoice, you can always report it over the phone. Call the company directly using a number listed on its website, rather than complying with requests from cold callers.

This is true even if you recognize the number. Phone numbers can be spoofed, so even if the number looks legit, it could still be a scam.

RELATED: PSA: Don’t trust caller ID, it can be faked

Banks might not help victims of such scams

If you get caught up in a scam that has you “voluntarily” wire money to another account, chances are your bank won’t help you. You will not be covered by the usual protections that apply to credit card fraud and online payments, where cards are cloned or details taken from a website. Many banks claim that because you authorized the payment, it is technically not fraud.

Despite this, social engineering is one of the leading causes of money and data loss in the world today. Building a rapport with their victims allows scammers to prey on an individual’s trusting nature, which impacts everything from trade secrets to personal bank accounts.

Even if you think your bank won’t help you, you should still contact them to let them know you think you’ve been scammed. In the event of a Zelle scam that ties your number to an account that is not yours, they will help you recover your number for future use. They may be able to reverse transactions, refund you, or conduct anti-fraud investigations.

You should also contact local law enforcement using non-emergency numbers or online forms to report the scam. It may help bring the perpetrators to justice, but you shouldn’t have too much hope of getting your money back this way.

Avoid online scams

If you use the internet or have a phone number, you’ve almost certainly encountered a scam of some kind. While most are easy to spot, the scammers cast a wide net so they only need a few bites for their schemes to bear fruit. Familiarize yourself with the most common online scams, including SMS smishing attacks, calls from phone numbers that look suspiciously like yours, fake recruiters or classic phishing scams that exploit product scarcity and impulse purchases.

RELATED: Scam Alert: Fake Recruiters Tried To Trick Us, Here’s What Happened

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