All peer-to-peer payment apps are vulnerable to fraud. But fraud complaints about the biggest P2P platform, Zelle, are soaring.
“I cannot believe how bad the Zelle fraud problem is, and how little the banks have done to stop it,” said Bob Sullivan, an investigative journalist and host of AARP’s The Perfect Scam podcast. He’s been reporting on problems with Zelle for more than 4 years now.
“Zelle’s biggest problem is that, because it is backed by the big banks, people associate traditional consumer protections with the service,” Sullivan said. “You implicitly think, ‘Well, I’m protected if I use Zelle,’— and you’re not.”
P2P transactions are instantaneous and irreversible, so by the time you realize you’ve been taken, it’s too late.
A study by Javelin Strategy & Research in 2020 found that 18 million people were scammed into sending money this way using these apps.
If you are tricked into transferring money to a criminal using Zelle – and report the fraud to your bank – there’s a good chance you’ll be told there’s nothing they can do to help you because you initiated the transaction.
If that happens, file a complaint with the Consumer Financial Protection Bureau.
Here’s my advice: Only use Zelle, or any other P2P app, to transfer money to someone you know and trust. Treat it like cash. Because if you do send your money to a crook, and complain to your bank or credit union, they may not help you.
More Info: Zelle Scams Spike; Banks Often Refuse to Help
