When my cousin in the United States sent his $1,500 rent payment via Zelle, he obviously had no reason to suspect any form of problem.
He received a usual confirmation from his bank but did not have any idea of the fact that his transaction was about to become yet another chapter in an ongoing saga of Zelle scams and accidental money transfers. But unfortunately for him, it was the case.
From what my Aunty said, the number to which he sent the money was just a single digit off.
The unintended recipient did not respond to her son's countless calls, sure because the recipient thinks that they were the target for a Zelle scam. And he wants a refund.
Zelle, an online money transfer platform, is at hit now for allowing transfers between customers and scammers. According to Eliot.org, there is an ongoing class action suit against Bank of America that claims the financial institution downplayed "huge" security risk for linking Zelle to one of its bank accounts.
There surely is light at the end of the tunnel for Zelle customers since the Consumer Protection Bureau (CFPB) is reportedly preparing new guidance that would require banks to reverse fraudulent transfers. Most of the banks that participate with Zelle, also counting Bank of America, JP Morgan Chase, and Wells Fargo are reportedly at the edge of announcing plans to refund some customers for fraudulent purchases made via Zelle.
In case you have been a victim of a Zelle scam and you might want to know how to get money back from Zelle if Scammed, then you have found the right article.
Fortunately for you, there are technics to get your money back and regulations that will help you do it without any hassle.
Table of Contents
What Is A Zelle Scam?
A Zelle scam refers to fraudulent activities or schemes where scammers attempt to deceive individuals into sending them money through the Zelle payment service. These scams can take various forms, and scammers continuously adapt their tactics to exploit unsuspecting victims.
How Does Zelle Scam Work?
In my cousin's case, it cannot be referred to as a Zelle scam because a transaction is considered as Scam if you were aware of it and you gave your "green light" and consent for the payment to be sent.
Regardless of the fact whether you were played on or convinced to authorize the payment for a good or service that someone promised to give you but did not, this would be referred to as scam.
Chances of you getting your money back are slim due to the fact that you authorized the payment.
The most popularly reported scams are purchasing tickets, purchasing puppies and some other financial frauds like cash flips.
Most of reported Zelle scams are based on the use of pure social engineering, which implies intimidating people with false information.
The con artist will trick its victim into authorizing money transfers without their knowledge by making fraudulent claims and presentations that would push it victim.
A common scam is, Scammers may reach out to individuals through emails, text messages, or phone calls posing as Zelle representatives or financial institutions. They may request personal information, such as Zelle login credentials or banking details, claiming it is necessary to resolve an issue or to verify an account. However, providing such information can compromise your financial security.
ALSO READ: Does Zelle work With Cash App? (Explained)
Is Zelle Safe to Receive Money From Strangers?
No, you should not use Zelle to send and receive money from strangers, even though it is a safe platform for sending and receiving money. Zelle uses bank level encryption and advanced authentication and monitoring features for security and this is not designed for commercial transactions.
It is even recommended by Zelle that you use the service to send money to "friends, relatives and others you trust". But in case you do not know the person or you are not sure of getting what what you paid for, then do not use Zelle.
Like for example, Zelle says don't use the service for items bought from an online bidding or sales sites. The transactions it warns are "potentially high risk".
Can Zelle Refund Money If Scammed?
Zelle's transactions are carried out via bank accounts and Zelle acts more of a middleman to ease bank-to-bank transfers, meaning that Zelle does not hold any funds as an intermediate.
It is clearly stated in Zelle's terms that you cannot cancel a payment or get a refunds if your authorized a payment to someone already enrolled with Zelle.
With that being said, Zelle cannot refund money if scammed.
Even though Zelle cannot do much to help you get a refund for your payment sent, Zelle can help report the issue to your bank or credit Union which would help to further prevent more scams in the milieu.
In case you have been a victim of a Zelle scam and your bank refuses to return your money, file a complaint with the Consumer Financial Protection Bureau, which forwards complaints to financial institutions to respond.
Also you can better still call the CFPB at 855-411-2372.
However, there is still a method you can use to get money back from Zelle if scammed and I am quite sure so many individuals do not yet know this.
How to Get Money Back From Zelle If Scammed
It is clearly said in Zelle that "Because you authorized the payment, you may not be able to get your money back".
This is simply to let you know that there is not much Zelle can do in order to help you get your money back if scammed.
The very first thing you need to do in order to get your money back from Zelle if scammed is to contact your financial institution.
Incase your financial institution takes up much time just to respond you, then you can consider reporting the scam to Zelle by filling out this form.
Once you filled the form properly and send, Zelle will send it to your financial institution and this would trigger them to give you a proper response on time.
Even if your financial institution does not provide you with steps to get your money back, do not worry, as you still got a chance to get your money back from Zelle if scammed.
Some money transfer apps and Zelle cannot just let you transfer money and go away from the transaction.
You have the option to dispute an ATM withdrawal, debit card purchase, or electronic funds transfer under little-known regulation known as Regulation E.
The Electronic Fund Transfer Act (EFTA) authorized regulation protects consumers during fund transfers.
The Electronic Fund transfer Act, most often known as "Reg E", gives consumers legal rights and protections in the event of fraudulent payments and also protects customers during electronic money transfers according to CFPB.
In a nut shell, we can say that the regulation covers all electronic fund transactions made by peer-to-peer payment services.
Below are what will be required from you to inform your financial institution of a fraudulent transaction:
- Keenly investigate the oral or written allegation of error.
- Finalize its investigation within 10 business days.
- Reports the results of its investigation within three business days after completing its investigation.
- In case it is determined that an error had occurred, you need to correct the error within one business day.
Several individuals are not aware of these consumer protection because Regulation E is not widely publicized by banks.
What Kind of Transactions Does Regulation E Cover?
Regulation E generally covers errors, unlike the more official and regulated credit card dispute resolution process. Error here is defined as:
- An authorized electronic fund transfer.
- Your receipt of an incorrect amount of money from an ATM.
- An incorrect electronic fund transfer to and from your account.
- The omission of an electronic fund transfer from a periodic statement.
- A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer.
Does Regulation E Apply to a Fraudulent Transaction?
According to the regulation, a transfer that was started without your consent and for which you did not get any benefit, is an electronic fund transfer.
Other examples of unauthorized transfers are accessing a device that was gained via theft and transfers that you were coerced into doing.
But transfer that you make when acting dishonestly or when granting someone else access to your device are excluded.
According to several experts, Regulation E can apply to aby circumstances in which access to a device was fraudulently gained.
In this case, Regulation E applies to you if you were victim of a phishing fraud or transferred money.
How Do You Use Regulation E to Reverse An Accidental (Fraudulent) Transfer?
EFTA is the dispute resolution process for faulty or fraudulent transactions. It reflects the process for handling credit cards disputes.
You Have 60 Days to Report the Error
You have exactly 60 days for the institution to receive your disagreement following the date on which the financial institution send the periodic statement or gives the passbook documents.
You Have to Document the Problem
Documentation is always involved especially when it concerns Financial institutions. You must provide the institution with your name and account number. You must also mention the error, along with its type, date and severity.
Writing a Letter might be required
You can report an issue to your bank over the phone or in person.
But in case you receive an oral notice of an inaccuracy, your financial institution may need you to confirm it in written form within a timeframe of 10 working days.
Depending on your bank, they might require more information or documentation.
How Do You File A Dispute Under Regulation E?
There a very few individuals aware of the Regulation E due to the fact that the claim filling process is almost not known outside of the financial services sector. Generally, banks do not provide as many simple methods for filling a dispute as they do for credit card chargebacks.
In order to know more about a Regulation E issue, it is often advisable that you call your bank and then your bank can want you to provide the following details in written form:
- Your account number.
- The kind of resolution you are requesting.
- The types and amounts of errors and/or unauthorized transactions.
- The date on which the periodic statement was sent showed the first unauthorized transaction.
- When you lost the money and the transaction numbers.
- The date on which you notified the bank of the lost or stolen card or unauthorized transactions.
The correctness of the charge determines whether the investigation will be successful.
Your financial institution will likely contend that you or the institution made a math error.
Can You Cancel a Zelle Payment?
Canceling a Zelle payment is only possible for any of the two instances below.
- If you sent money to the wrong person.
- If the payment expires.
Cancel a Zelle Payment If Money to the Wrong Person
Incase you typed in a wrong phone number of email address, then you might be able to cancel the payment.
But this is only possible if the receiver's bank account has not yet been credited with the funds. You can cancel a payment with the Zelle App or your mobile banking app.
Below are the steps to follow if you want to cancel the payment via the Zelle App:
- Open your Zelle app on your device.
- Click on the Zelle Experience option.
- Move to your Activity page.
- Locate the payment you want to cancel.
- Choose the Cancel This Payment option.
In case you have chosen to cancel the transaction from your mobile banking app, then the procedure may vary with respect to your bank.
- Login t your online banking account.
- Check your pending transactions.
- Cancel the transaction if it is listed in that section.
How to Get Your Money Back If The Payment Expires
Zelle allows you to send money to individuals even if they have not yet signed up. All you need is their phone number or email address.
Once you sent the money, they will receive a text message or email address, alongside a link that will help them set up the Zelle account and then claim the funds.
The payment will expire in case your receiver does not sign up for Zelle in 14 days of receiving the funds.
In case this happens, you will be informed and the money sent back into your account directly without any hassle.
In case any additional issue arise with the transaction, Zelle customer will get to you.
How to Avoid Zelle Scams
It's important to remain vigilant and aware of potential Zelle scams. To protect yourself:
- Be cautious about sharing personal information and financial details, especially with unknown individuals or organizations.
- Verify the identity of the sender or recipient before initiating a transaction through Zelle.
- Take time to research and confirm the legitimacy of any offers, deals, or requests before sending money via Zelle.
- Trust your instincts. If something feels suspicious or too good to be true, proceed with caution or avoid the transaction altogether.
- Regularly review your financial accounts and statements to spot any unauthorized activity promptly.
- Report any suspected scams or fraudulent activity to Zelle and your financial institution.
Final Thoughts: How to Get Money Back From Zelle If Scammed
It if of no doubt that Zelle is actually a safe, secured and convenient way for sending and receiving money between bank accounts.
Since it a well known money transfer service with millions of customers, it is a huge target for scammers who are out for their fraudulent activities.
In case you have been scammed and you are looking for how to get your money back from Zelle, then it is good idea that you consider contacting your financial institution directly which should provide you with more details with regard to the transaction and if possible with the steps to help get your money back.
Frequently Asked Questions
Can a Zelle payment be disputed?
Yes, If you believe that an unauthorized transaction has occurred or that you have been the victim of a scam, you can contact your financial institution to dispute the payment.
How do I get my money back from a scammer?
Contact your bank immediately to let them know what's happened and ask if you can get a refund. Most banks should reimburse you if you've transferred money to someone because of a scam.