ABC-owned TV stations first reported widespread Zelle schemes involving Bank of America customers, but scammers are taking advantage of the platform’s instantaneous, irreversible transactions — and ambiguous federal government regulations — to make show more creativity in their schemes.
In the latest development, the fraudsters pose as Wells Fargo bank employees to solicit money.
Our sister station KGO-TV reported that Cynthia Marin of Concord, Calif., received a text message asking if she had approved a Zelle deal with “TRAVIS” for $3,500. She replied “No”.
Shortly after, she received a call from a Wells Fargo number. It was likely a case of spoofing, meaning the caller deliberately tampered with the information sent to Marin’s caller ID screen.
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Marin said the woman on the other line told her someone was withdrawing money on her behalf and that she needed to quickly send funds back to her account through Zelle to stop it.
The scammer then instructed Marin to begin the transfer by typing his first and last name in the “Add recipient” field and leaving the field for his email address or phone number blank.
After the transfer was processed, Marin received a notification from Zelle that “Cynthia Marin” was now a recipient. She also received text notifications that appeared legitimate.
“CYNTHIA MARIN sent you $1,000.00 with Zelle. To accept your money, visit: https://enroll.zellepay.com. Reply STOP to end messages or HELP to get help,” reads- we in the text.
The imposters, however, created a Zelle account in his name and used it to receive these funds.
When Marin checked his Wells Fargo account, only $6 remained.
“The money is gone. It’s gone. It’s just gone,” she said.
“It’s just scary. It’s a scary feeling,” she added.
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The crooks also attacked Kelly Reynolds, from San Jose, California, using a similar technique.
Reynolds told KGO-TV that the scammer not only spoofed the call, but gave him the name of a real Wells Fargo bank agent.
Both victims said Wells Fargo did little to protect their funds. Both filed claims, and both were denied. Wells Fargo said their Zelle payments had been “processed as requested” and therefore a refund would not be processed.
“They really, really did nothing,” Reynolds said.
“Whether I have $1 in there, or I have a million dollars in there, I should be protected,” Marin agreed.
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As reports of Zelle scams grew in 2021, Bank of America and others initially refused to offer refunds, saying customers “authorized transactions” and that Zelle was a “third-party app” with “no protection against fraud”. (Zelle is owned by Early Warning Services, LLC, a private financial services company owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, US Bank and Wells Fargo.)
Bank of America had since refunded some customers after KGO-TV reported that the Federal Electronic Fund Transfer Act requires banks to reimburse consumers for fraudulent money transfers.
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And unlike credit cards, most quick payment apps don’t offer fraud protection.
“There’s virtually no consumer protection on these Zelle transactions. So people started using them, like you might use a credit card to say, buy tickets to a concert they saw on Craigslist. And that’s a terrible idea because there’s no way to get your money back,” said cybersecurity expert Bob Sullivan.
Proponents say federal laws should protect consumers in these scams since they were tricked into giving away their funds and banks are supposed to protect their customers’ accounts.
They want the Consumer Financial Protection Bureau to crack down on banks for not refunding customers or putting more guarantees for Zelle transfers.
“It will probably take years for banking regulators to catch up with what’s going on with Zelle,” Sullivan said.
And while regulators catch up, Zelle continues to grow. Recently, the company reported that 1.8 billion payments were sent in 2021, a 49% increase from the previous year.
Wells Fargo told KGO-TV it investigates each individual fraud case. His full statement is as follows:
It is disheartening that scammers actively pursue and defraud victims, and we understand the frustration and anger expressed by victims. We don’t want anyone to fall for a scam and we want to make sure everyone is aware that criminals can spoof a caller ID number so that it appears as if a call or a SMS came from your bank. To be sure, don’t answer. Contact your bank using legitimate sources, such as the number on the back of your debit card.
We are actively working to raise awareness of common scams and to remind customers that Zelle transfers are immediate and should be treated like cash. At the same time, we continue to update and strengthen our practices and procedures to combat and help prevent scams.
We are also committed to complying with all regulations governing transactions, including Regulation E. This is a priority for us and our industry.
- When we are made aware of a scam, we have a thorough investigation process to research the claim. Once our investigation is complete, we communicate the results directly to our customers.
- Because Zelle is an immediate form of payment, recovering funds for scam victims is generally not possible, but we will work with other financial institutions and law enforcement agencies in an effort to trace the suspects and attempt to recover funds for our customers.
- We are unable to discuss information about specific customers or our process for investigating complaints filed, due to customer privacy and confidentiality.
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