Greg's Corner

Is Zelle deflecting blame for role in scams?

By Greg Collier

The Zelle scam has been grabbing headlines since at least last October. In that time, the seven banks that own Zelle have done little to prevent scammers from using their platform to steal from their customers. It seems the only way victims can ever get their money back is by contacting their local media. This should not be the way for customers to resolve issues over an app that is obviously plagued with security issues. Recently, a representative from Zelle gave a comment to the media that seems to sum up their ongoing stance on the scam.

But before we get into the nitty-gritty, Zelle is a payment app that is owned by seven of some of the biggest banks in the country. Zelle is supposed to only be used between friends for things like settling a restaurant bill. Instead, scammers have used it as a virtual open door into the customer’s bank account, where the scammer can just walk in and take what they want.

Typically, the scam works like this. You get a text message that appears to come from your bank. The text message asks if you’ve recently made a large purchase or payment. You’re then asked to reply either yes or no to the text message. When you reply to the text message, your reply will be followed up with a phone call from scammers posing as your bank’s fraud department. The scammers will walk you through a process on the Zelle app that the scammers say will protect your account from any fraudulent activity. What’s really going on is the scammers are instructing you on how to put your money in the scammer’s account.

As we previously mentioned, the only way victims have been able to get any kind of restitution is by contacting their local media. Once the victim is featured in a news story, it’s usually just a matter of time before the bank returns their money.

This recently happened in the Denver-area. A victim there lost $3,000 to the scam, but had her money returned by her bank once she appeared on the local news. It’s in this story where Zelle gives a comment that basically sums up their largely inactive stance on the matter.

In a statement to Contact Denver7, the operator of Zelle wrote, “Zelle does not hold the funds. We provide messaging between financial institutions.”

I think it goes without saying that this isn’t the correct attitude to take.

Zelle has claimed that they have published tips on the app to help avoid scams, but that doesn’t appear to be enough since the scam keeps finding victims. It also doesn’t help that Zelle offers little in the way of protections if it’s used in a fraudulent manner. Since Zelle is owned by seven different banks, it gives the illusion of protection, whether that’s warranted or not.

If Zelle and its owners want to encourage users to use their app, staying silent while their customers lose money isn’t the way to go about it.

If you receive a phone call from someone claiming to be from your bank, politely end the call and call your bank’s customer service department back at the correct customer service number. The number can usually be found on the back of your debit card or on the bank’s website.