For consumers who have fallen victim to imposter and fraud scams on Zelle, good news is on the way. The company will refund lost money to consumers who have been duped by scammers pretending to be a bank, government agency, or service provider on Zelle.
Consumers have been losing money from these scams for years. According to an investigation by Senator Elizabeth Warren, consumers lost $440 million to fraud and scams in 2021.
However, federal law didn’t require Zelle to refund users their money for imposter or fraud scams – refunds were only issued to those whose accounts had been hacked.
The problem has become so persistent over the last few years that senators and the Consumer Financial Protection Bureau (CFPB) have put pressure on Zelle to start refunding users involved in imposter scams.
Getting money back from scammers
These efforts have paid off, and now users can expect to see refunds in their accounts after falling victim to these scams.
Users’ refunds will come from the scammers themselves. Rather than having the banks lay out money from these scams, Zelle has implemented a protocol that will allow it to take the money back from those who stole it.
Zelle is also taking further steps to ensure that consumers are sending money only to people they know. The money-sharing app will start flagging accounts they consider suspicious, including those who have never sent money on the platform.
Zelle started issuing refunds on June 30 to consumers involved in these incidents, and users can report imposter scams to the company here.
What do impersonation scams look like?
To ensure that consumers can spot these impersonation and fraud scams, Iskander Sanchez-Rola, director of privacy innovation at Gen, shared insights with ConsumerAffairs on what to look for. He explained that there are two primary types of impersonation scams:
“Scammers often use the credibility of payment apps to scam victims out of money,” Sanchez-Rola said. “One tactic is sending a text saying that a payment app discovered a suspicious transaction. The message will include a link to provide information about any credit cards or bank accounts linked to the payment app. After sharing this information, scammers will use it to access your bank accounts or run up charges on your credit cards.”
“Another scam tactic is unsolicited messages from strangers wanting to send you money but first need more information about your accounts. These are almost always scams from criminals that should be deleted and blocked immediately,” Sanchez-Rola said.”
Keep your accounts safe
Once you know how to spot an impersonation scam on Zelle or other banking apps, the next thing to know is how to protect yourself, your personal information, and your money. Sanchez-Rola shared some of his best tips for consumers to keep their accounts safe:
Avoid clicking on links: If you receive a text claiming to be from a payment app, avoid clicking on any links in the message. If you’re worried that there might be a problem with your account, call the payment app at its publicly listed customer service number and ask.
Adjust your in-app privacy settings: Some payment platforms automatically make your payment history and activity public. This information can include the name of the person or business you sent money to, the date of the transaction, and the purpose of the purchase. While this information might seem harmless, someone studying it could see when you're away from your home, or where you live, based on your transaction history.
Enable automatic app updates: One way to keep the payment apps you regularly use safe is by enabling automatic app updates on your phone. These updates help fend off the latest viruses or malware. If you don’t enable automatic updates, you’re leaving your apps more vulnerable to malware or spyware.
Set up payment notifications: Setting up payment notifications will also alert you to any unauthorized payments made through your app if this information gets into the wrong hands.
Photo Credit: Consumer Affairs News Department Images
Posted: 2023-12-04 12:22:51