ABC-owned television stations reported this for the first time widespread Zelle schemes involving Bank of America customersbut scammers are using the platform’s instant irreversible transactions – and ambiguous federal government regulations – to be more creative in their tricks.
In the latest development, fraudsters impersonate Wells Fargo employees to extort money.
Our affiliate station KGO-TV reported that Cynthia Marin of Concord, California, received a text asking if she had approved Zelle’s deal with “TRAVIS” for $ 3,500. She replied, “No.”
Shortly afterwards, she received a phone call from Wells Fargo. This was probably an example deceptionwhich means that the subscriber intentionally falsified the information transmitted to the display of the subscriber identifier Marina.
Marin said the woman on the other line told her that someone was withdrawing money in her name and she needed to quickly send the funds to her account through Zelle to stop it.
The scammer then ordered Marin to start the transfer by entering her first and last name in the “Add Recipient” field and leaving the field for her email or phone number blank.
After the translation was processed, Marin received a notification from Zela that the recipient was “Cynthia Marin.” She also received text notifications that looked legitimate.
“CINCIA MARINE has sent you $ 1,000.00 with Zelle. To accept your money, visit: https://enroll.zellepay.com. Answer STOP to finish the message, or HELP for help, ”the text reads.
However, the impostors created a Zelle account in her name and used it to obtain these funds.
When Marin checked his Wells Fargo account, there was only $ 6 left.
“The money is gone. Disappeared. They just disappeared, ”she said.
“It’s just scary. It’s a scary feeling,” she added.
Fraudsters also hunted Kelly Reynolds of San Jose, California, using a similar technique.
Reynolds told KGO-TV that the scammer not only cheated the call but also gave her the name of a real employee of Wells Fargo Bank.
Two victims said Wells Fargo did little to protect their funds. Both filed claims, and both were dismissed. Wells Fargo said their Zelle payments were “processed as required” and therefore the return will not be processed.
“They really, really didn’t do anything,” Reynolds said.
“Whether I have $ 1 or $ 1 million, I have to be protected,” Marin agreed.
As reports of Zelle fraud increased in 2021, Bank of America and others initially declined to offer a refund, arguing that customers “sanctioned transactions” and that Zelle is a “third-party app” without “fraud protection”. (Zelle is owned by Early Warning Services, LLC, a privately held financial services company owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, US Bank and Wells Fargo.)
Since then, Bank of America has returned money to some customers after KGO-TV reported that Federal Electronic Funds Transfer Act requires banks to return money to consumers for fraudulent remittances.
And unlike credit cards, most fast-paying apps don’t provide protection against fraud.
“There is virtually no consumer protection in these Zelle transactions. So people started using them like you can use a credit card to say buy tickets to a concert they saw on Craigslist. And it’s a terrible idea because there’s no way to get a refund, ”said cybersecurity expert Bob Sullivan.
Lawyers say federal laws should protect consumers in these scams because they have been tricked into giving away their funds, and banks should protect their customers ’accounts.
They want the Financial Protection Bureau to deal with the banks for not returning money to customers or introducing additional guarantees for Zelle transfers.
“It will probably take banking regulators years to catch up with what is happening with Zele,” Sullivan said.
And while regulators are playing catch-up, Zelle continues to grow. The company recently reported that in 2021, 1.8 billion payments were sent, which is 49% more than the year before.
Wells Fargo told KGO-TV that it is investigating every single case of fraud. The full statement is as follows:
It is sad that fraudsters are actively harassing and deceiving victims, and we understand the frustration and anger expressed by victims. We don’t want anyone to be caught in a scam, and we want to make sure everyone knows that criminals can spoof a caller ID number to make it look like a call or text from your bank. To be safe, don’t answer. Contact your bank using legitimate sources, such as the number on the back of your debit card.
We are working hard to raise awareness of common scams and remind customers that Zelle transfers are immediate and should be treated as cash. At the same time, we continue to update and strengthen our practices and procedures to combat and prevent fraud.
We also strive to comply with all rules governing transactions, including Regulation E. This is a priority for us and our industry.
- When we receive a notice of fraud, we have a thorough investigation to investigate the claim. Once we complete our investigation, we report the results directly to our clients.
- Because Zelle is an immediate form of payment, refunds for victims of fraud are usually not possible, but we will work with other financial institutions and law enforcement to track down suspects and try to recover funds for our customers.
- We are unable to discuss information regarding specific customers or our process of investigating claims that have been filed, due to the privacy and confidentiality of customers.
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