Peer to Peer Payment Payment Service (P2P)  Zelle is used by many people to quickly and conveniently send money electronically from your credit card or bank account. Sending money through Zelle only requires you to enter the recipient’s phone number or email address.  Zelle is an app created by the company Early Warning Services (EWS) which is owned by seven of the biggest banks in the United States including Bank of America and Capital One.  Presently 2,400 banks and credit unions offer Zelle as a service.

Unfortunately, Zelle has proven to be easily exploited by scammers and unlike scams targeting your credit cards directly, you may not have as much protection under the law to get your money back if you do get scammed.  In addition to scammers luring their victims to pay for worthless items through Zelle, scammers are also sending phishing emails and text messages in which they lure their victims into providing their Zelle usernames, passwords and PINs to take over their victims’ bank accounts through their Zelle accounts.  Ironically, if your Zelle account is hacked, you are protected by law, but if you are tricked by a scammer into sending a Zelle payment, you didn’t have any protection until now.

A report issued in October by Senator Elizabeth Warren that analyzed Zelle use at 7 banks over the last 18 months indicated that there were 192,878 fraud cases totaling 213.8 million dollars, but that only in 3,500 cases did the banks reimburse their customers.  In the Scam of the day for December 24, 2023 I told you that after pressure from Senator Warren and others, the banks that own Zelle were in the final stages of negotiations to provide for people who became victims of Zelle scams to be reimbursed for their losses by their bank. Now, as reported by Leslie Gaydos of NBC Boston,  Zelle banks and credit unions will reimburse customers who are victims of qualifying imposter scams where the scammer poses as a bank to trick the customer into sending them money through Zelle.


Before signing up for any Zelle or any other P2P service, you should familiarize yourself with their fraud protection rules. In the fine print of many P2P services, you may find that you have little, if any, protection if you use the account to purchase something that ends up to be a scam. While PayPal offers significant protection from fraudulent transactions.  Even when these new rules go into effect, Zelle should never be used for commercial transactions, but only to transfer small amounts of money to people you know. In order to protect your account from being hacked and being taken over by a scammer who could access your credit card or bank account, you should use a PIN or other dual factor authentication whenever your particular service provides for it.

To avoid having your Zelle account and other accounts from being taken over by hackers, never provide your username, password or PIN in response to any email, text message or phone call unless you have absolutely confirmed that the request for this information is legitimate, which it never is. You can confirm this by contacting your bank or other company by calling them at a telephone number you know is accurate. Even if you get a call that appears to come from your bank or other company with which you do business, your Caller ID can be tricked by spoofing to make the call appear legitimate when it is not.

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