How to avoid Zelle scams, and what to do if you can't

Zelle is a peer-to-peer payment network used by more than 1,000 banking apps. Like other P2P services, Zelle makes it convenient to send money to friends and family using their email address or phone number. But as convenient as it can be for you, it’s also that convenient for scammers who want your money.

Recently, Zelle has been in the news because criminals are using the platform to scam people into sending them money. Banks and credit unions are not responsible for money lost from P2P scams because people are knowingly making a payment themselves, unlike fraudulent transactions resulting from stolen credit or debit cards.

With Zelle, “your recourse options are very limited,” says Akeiva M. Ellis, co-founder of The Bemused, a financial literacy consultancy for young adults.

Here are a few tips to protect your money when using Zelle or any other P2P payment app, plus steps to take if you experience a scam.

Who do you trust?

Reserve Zelle and other money transfer apps for paying people you already know and trust, says Robert Burda, chief strategy officer and interim CEO of the nonprofit Cybercrime Support Network, whose work includes operating the nonprofit FightCybercrime.org as a resource for victims. “Once the payment’s sent, like cash, it’s gone,” he says.

When using money transfer apps, use the phone number and email address that you have on file. Be suspicious if someone you’ve been communicating with (and whose contact information you know) asks you to send the money to a different phone number or email address. That’s a sign that their account might have been hacked, says Ellis.

Red flag on urgent payment requests

“In general, scammers are often creating a sense of urgency,” says Alexis Castorina, the head of consumer education at Zelle, who is based in Scottsdale, Arizona. Before making a payment, especially if you're feeling rushed, think it through to see if it's legit.

Someone might claim to be from a company you do business with (such as your utilities company) and threaten to shut off service if you don’t make a payment immediately. These sense-of-urgency and scare tactics are red flags, Castorina says.

Surprised? Be on guard

Be wary of unexpected communications claiming to be from your bank or any service provider, says Ramona Maior, a certified financial planner in the Phoenix area. Email addresses and phone numbers on caller ID can be “spoofed” or faked to look like they’re from your bank, for example, so don’t rely on what pops up on your caller ID or what an email sender’s name looks like at a quick glance.

If the person claiming to be from your utilities company or bank demands payment using a P2P service rather than your usual method, let them know that you’ll call the company yourself to handle it. Look up the official phone number and reach out to confirm whether you do actually owe money and how you should send it. 

What to do if you’re a victim of a P2P payment scam

Despite your best efforts, scams are so prevalent and ever-changing that you might not be able to avoid one. What do you do?

Report the scam. “We want individuals to immediately contact their financial institution,” says Castorina. “They can then do some further investigation to see what exactly has happened.”

Zelle app users can also report the scam to Zelle by calling the company’s customer service number or filling out a contact form on the company’s website.

It’s a good idea to report the scam to FightCybercrime and to the FBI. Doing so helps prevent others from being scammed and provides information that could be the missing piece of a bigger scam or trend.