Consumers can get money back in some Zelle-related scams but which ones?

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Crooks know the maneuvers to make, often starting out by impersonating a bank or someone else, to steal money out of your bank account via the Zelle app.

Too many times, the consumer is stuck on the hook and out the cash.

After much public pressure, the network operator of Zelle — which is owned by a consortium of big banks — says it is implementing new requirements to “mandate consumer reimbursement for certain types of scams” on the Zelle Network.

What types of scams? Not a clue. So, admittedly, it’s tough for consumers to know just how friendly the new policy will be. Or if their bank should help them when they’re not getting any help. But, maybe, there’s a bit more hope that you might get your money back.

Maybe, but why the secrecy?

The Zelle money transfer app.

The Zelle money transfer app.

Not giving clues to scammers — or consumers

“We are not sharing more details about which scams are covered to avoid tipping off fraudsters, and we will continue to evolve our requirements to address new patterns,” according to a statement sent Thursday to the Free Press by spokeswoman for Early Warning Services LLC, the network operator of Zelle.

The new requirements, according to the statement, are being added to “ensure consistency across the Zelle Network and improve consumer benefits.”

For consumers who have been hit, I’d suggest taking this statement to the bank. It’s worth protesting even more if your bank won’t reimburse you after money was drained from your account via a Zelle-related scam, maybe even an impersonation scam. Under the policy change, supposedly banks would be required to assume more liability in some cases involving transactions through the Zelle network. Consumers can submit complaints, too, with the Consumer Financial Protection Bureau at

Many times, consumers told me they had never even used the Zelle app but it ended up being easily found — once scammers directed them where to go — via their own bank’s online banking services or mobile app. Increasingly, we’re seeing reports across the country of people who lost money and didn’t get it back.

Zelle is a hot tool for scammers

Many consumers know that you shouldn’t try to resolve a problem — say a sudden call from the IRS or a utility company — by putting money on gift cards. But they’re less aware of the damage that can be done via a money payment app.

In one scam, you might get an unexpected message from what looks like your bank or credit union about a so-called Zelle payment. If you didn’t make a payment, you might respond “no.” But then the scammers call, pretending to be from the bank, to tell you that someone has transferred money out of your account. Hang up. The next step is that the scammers will tell you that in order to retrieve the money back, you’re going to need to Zelle yourself back the money. Don’t do it.

Many consumers — and regulators — aren’t happy with the way scammers have been able to walk through a loophole in the banking universe. News that more steps are being taken — even vague steps — could be welcome.

“We believe the changes will be a step in the right direction, but how big a step?” said Ed Mierzwinski, PIRG Education Fund’s senior director of federal consumer programs.

“Will they only apply to transactions involving a customer of one seven big banks that own Early Warning Services together or to customers of all the banks and credit unions that license the Zelle product?” he asked.

“Will victims be made whole? We don’t know yet.”

Mierzwinski isn’t impressed with how Zelle appears to disclosing changes without really spelling out what’s being done.

Is Zelle playing games?

We’ve heard dribs and drabs of news about revised rules ahead for months now. Both the Wall Street Journal and the New York Times wrote in late November that sources said something was in the works, likely for early 2023, when it comes to new refund rules to help fraud and scam victims.

On March 21, WMAR-TV in Baltimore reported that a spokesperson told them “Zelle is revising its network rules as part of ongoing efforts to protect users against the most recent fraudulent schemes.”

Again, not a lot of details.

Consumers are warned that con artists are impersonating banks to trick consumers into transferring them cash via person-to-person payment apps.

Consumers are warned that con artists are impersonating banks to trick consumers into transferring them cash via person-to-person payment apps.

“They’re playing games with consumers, consumer advocates and reporters,” Mierzwinski said. “They’re not telling us what they’re doing and they’re saying it’s for their good because it will keep the fraudsters from knowing as well.”

Clever but disclosure is the name of the game these days. If you don’t know the rules, how exactly do you know who is right and who is wrong?

“Consumers need to know whether they’re going to be made whole,” Mierzwinski said.

The Early Warning spokeswoman later said that the new policy “applies to all financial institutions participating in the Zelle Network.”

But she added: “We will not disclose any further information about the timing or details to avoid tipping off fraudsters.”

Losses are reizable

PIRG’s research arm, the US PIRG Education Fund, has been persistently raising awareness about fraud and other problems involving peer-to-peer payment apps, such as Zelle. The group issued a report called Virtual wallets, real complaints in June 2021.

The peer-to-peer apps offer an easy way to donate to a friend, say someone who is buying the latest going-away gift at the office. But it’s a terrible idea to exchange money quickly with a stranger — or someone claiming to be from a business or bank that calls you out of the blue.

For 2022, consumers who were victims of fraud reported losing $1.59 billion by “bank transfer/payment,” the largest dollars lost in a category, according to data from the Federal Trade Commission Consumer Sentinel Network.

Fraud losses involving cryptocurrency hit $1.43 billion, ranking second in dollars lost in 2022.

The third highest payment method used by scammers to obtain money involves wire transfers, which reached $310.9 million in reported losses in 2022, followed by money stolen through gift cards or reloadable cards at $228.1 million in reported losses.

The Consumer Financial Protection Bureau has been reviewing complaints and there’s some talk that possible guidance could be issued that would require banks to bear more liability for losses relating to fraudulent peer-to-peer transactions. The CFBP had no updates to share as of April 3, according to a spokesperson.

On March 2, five Democratic US senators sent a letter to regulators requesting more of a crackdown, noting that Zelle’s “model has opened the door to fraud and scams on a tremendous scale.”

The letter noted that banks often take the position that they are under no obligation under the Electronic Fund Transfer Act, known as Regulation E, to make customers whole when fraudsters use the network to steal their hard-earned money.

“Instead, depository institutions appear to have forced their customers to foot the bill in the vast majority of these circumstances, often relying on ambiguity over whether a payment is classified as ‘authorized,’ ‘unauthorized,’ or an ‘error’ to avoid reimbursing customers who have been victims of fraud,” the letter stated.

Zelle “doesn’t offer a protection program for authorized payments,” according to Early Warning Services. And if you authorized it, well, you were out. Zelle has defended its practices, noting that warnings appear online.

“Many financial institutions on the Zelle Network have been going above and beyond what the law requires to reimburse their customers for certain scams,” according to the statement to the Free Press from Early Warning Services. Early Warning Services is owned by seven big banks — Bank of America, Capital One, Chase, PNC Bank, Truist, US Bank and Wells Fargo.

Zelle is found easily on banking apps for some 1,800 banks and credit unions across the country.

What are some of the scams?

In early January, I wrote a column about how bank customers were targeted during the holidays by crooks impersonating the fraud department of their bank or credit union.

I’ve heard of some cases where bank customers were reimbursed but many young consumers and others told me that they lost $1,000 or more as money quickly got sent to scammers via a Zelle app.

more: Scammers pretend to be from your bank to drain your savings

more: DTE impersonators drained Rochester Hills woman’s checking account using the Zelle app

It’s good to warn family and friends that many scams start with a text or email that looks like a legitimate business, like your bank, is trying to contact you.

Many consumers sign up for alerts from their banks — so they’re not surprised to see one. But these texts aren’t real.

On March 16, the Federal Communications Commission adopted rules to require mobile service providers to block certain robotext messages that are “highly likely to be illegal.”

“Unlike robocalls, scam text messages are hard to ignore or hang-up on,” the FCC noted, “and are almost always read by the recipient, often immediately.”

The FCC noted that complaints about such texts have increased by more than 500% since 2015, counting about 18,900 complaints in 2022.

The best line of defense: Don’t click on the links, answer the call or provide information via text or website.

Sometimes, con artists pretend to be connected with Amazon and claim there’s fraudulent activity on your account.

Last June, I wrote about how crooks pretended to be a DTE Energy representative and then drained $1,324.85 from the bank account of a Rochester Hills woman via a Zelle app.

At one point the 61-year-old woman told me, it appeared that Bank of America was reimbursing her account and then the bank later changed its tune. Then, after the Free Press reached out to Bank of America, the woman told me that $1,324.85 was suddenly showing up as pending in her Bank of America account. Bank of America wouldn’t comment on the specifics of that case.

While it’s interesting that Zelle is now saying new rules will “mandate consumer reimbursement for certain types of scams,” consumers need to realize that there are all types of scams involved in these apps. Some, we don’t know which ones, won’t be covered.

In one scam, a prospective buyer might claim to want to buy an item you listed for sale on Facebook Marketplace. Then, the buyer — actually a scammer — says “you need” to upgrade your Zelle or another digital wallet app to accept money from their “business account” for the big-ticket purchase to go through, according to a June alert by the Better Business Bureau.

Again, you don’t need any such upgrades. It’s just another trick used by scammers to steal cash from you.

Or you might reach out on Facebook to see if someone in your area can bake a cake and trigger the attention of a scammer. According to a report made in late January to the Troy Police Department, someone offered to make a cake and cupcakes for an event but wanted $110 upfront via Zelle, perhaps for a deposit or supplies.

The woman sent the money — and the scammer then claimed the money never arrived and requested it three more times. The woman contacted her bank, which noted that the money was being sent to a Green Dot prepaid card. It was gone. After being confronted, the suspect stopped all contact.

The scammers know how to appear real and get your cash. Don’t bet on easily getting your money back now — even with a word of a few possible tweaks in the rules.

Contact Susan Tompor: [email protected]. Follow her on Twitter @tomboo. To subscribe, please go to

This article originally appeared on Detroit Free Press: Victims can get money back in some Zelle-related scams, but which ones?

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