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Zelle Scams

Zelle is a banking endorsed payment transfer system that is fast, secure and free. Definitely something you should consider for some of your bill pay or to send money to others for any reason.

Zelle is a payment system that transfers money directly from your account to another account for free. Nearly every bank and a few credit unions participate. The transfer is essentially immediate. My clients who pay me using Zelle just log into their bank, click the Zelle button and check me if they've paid me before or enter my email address and send me money. Less than a minute later, I'm notified that the money is in my account.
You do need to sign up through your bank for a Zelle account and link your bank account to it.

Here's how it looks from the front page of my US Bank account.


I click send money, then I click send money with Zelle.

Besides being very fast, the system is free to both the sender and receiver for personal accounts. What could be better?

However, such a nice quick transfer of funds does attract con artists and these reprobates have jumped on the Zelle system. One problem is that if you get bamboozled by one of these scalawags you might not have any recourse. The legal protections provided for credit cards, don't exist for Zelle. It's perfectly safe as long as you don't fall for some scam and pay them with Zelle. Some banks take the position that if you authorize payments from your account, they aren't responsible. PayPal has similar problems.

One common scam is for the scalawag to call or text your phone after having spoofed your bank. Their call appears to come from your bank. If it was a text, they may provide a fake phone number that also spoofs the bank. You think you're talking to the bank and are told you need to transfer your money right away because someone is trying to empty your account. The con artist will walk you through things, maybe even setting up a Zelle account to transfer your money to another account of yours. Then he gets between the two accounts and grabs all the money from that account.

Essentially, never use Zelle for anything unexpected. No emails or texts for outstanding bills. If you know the vendor and know the charge, it is a great way to pay. Some of my clients pay me that way and I appreciate saving the small credit card charge and the quicker deposit.

Never assume caller ID is right.

Caller ID is easy to spoof, so don't assume it's correct. Calls or texts that come from what appears to be your bank can be from anyone. Never call a number provided to you from a text or email or use their links. Always have a number for your bank and use it, or find a number on the Internet. Don't trust caller ID.

Further reading

Date: July 2022

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