In situations like this, criminals can easily set up a Zelle account on their own device using a victim's credentials. Social engineering is when a scammer lies about their identity or goal to trick victims into giving them personal information.Ĭriminals have used social engineering to contact victims and request the two-factor code that Zelle requires to set up accounts. ![]() "Zelle's ease-of-use can also make it possible for malicious parties and fraudsters to use social engineering to acquire Zelle credentials," said Tom Kelly, president and CEO of consumer privacy company IDX. But unauthorized transactions are usually fully reimbursable. ![]() In many cases, it all comes down to whether you authorized the transaction if you did, you're not protected. In the news: There have been reports in the media that banks have declined to help victims of scams and fraud due to Zelle's lack of fraud protection.īut you're not entirely without protection. If someone you don't know is requesting a payment via Zelle, I'd suggest declining," Rossman said. "Some scammers deliberately encourage you to pay them via Zelle with the intent of stealing your money. In fact, some criminals try to capitalize on that. If you send money to the wrong person, you're basically at the mercy of that stranger to send it back." There's no pending status, no chargeback mechanism, and no buyer protection of any sort. Ted Rossman, a senior industry analyst at said, "The key with Zelle is to only send money to people you know and trust. To send money on Zelle, you need to enter the recipient's phone number or email - but make sure you trust them. Thus, Zelle advises that you only use the service to pay people you absolutely know and trust. In other words, if you purchase something online and use Zelle to pay for it, you have no recourse if you never receive the item you paid for.įor example, if you use Zelle to purchase an item from Craigslist, and it turns out you were scammed, Zelle won't refund you. The biggest drawback of Zelle is that it doesn't offer fraud protection for authorized payments. From a privacy perspective, it's safer than alternatives, like Venmo and Cash App, since it's harder for scammers to access users' personal information," said Nishank Khanna, chief marketing officer at Clarify Capital.īut some well-publicized incidents of fraud are a cause for concern, and Zelle's consumer protection isn't especially robust if things go wrong. ![]() "Zelle is safe because it uses data encryption which offers users increased protection. However, Zelle was built by banks and was engineered to be safe. Zelle is safe if you know who you're sending money toīecause Zelle is fast - coupled with its status as the "official" digital payment system built into many banking apps - makes it a target for criminal activity.
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