Last fall, I moved to a new apartment and wanted to sell furniture that I didn’t need. I put it on Facebook Marketplace and shortly after multiple people contacted me. All of them were out of town, their friends/relatives wanted to pick it up, and they trusted me enough to pay me right now through Zelle. First, they needed my Zelle email and then asked for a phone number. After having multiple exact conversations, I noticed the pattern and started to report them immediately.
Despite Zelle being a popular scammer tool, all online payment services see their share of fraud. It’s notoriously hard to return money lost in these types of scams, although banks are being pressured into developing a solution for Zelle scam victims. Unauthorized transactions, resulting from account compromises raise the chances of getting money back, while authorized payments, when victims were tricked into sending money, rarely result in returning any money.
Senator Elizabeth Warren’s office released a report in 2022 showing that banks didn’t repay victims’ losses in 90% of cases of Zelle scams. The victims lost estimated $440 million just on this payment platform alone in 2021.
In order to recognize a scam with payment apps, investigators should look for nine elements of fraud:
- A security code. A bank employee calls and asks for a code to stop an ongoing fraud situation, or a marketplace buyer wants to make sure that the seller is a real person. They would use a code to verify a victim’s identity and get access to a wallet or a bank account and take them over. If a security code starts with G, it can lead to a breach of a Gmail account, or a phone number spoofed and connected to the criminal’s Google Voice.
- Pay-to-Yourself or “Move money to a safe account”. When a bank asks you to reverse unauthorized payments, move them to a different account for safe-keeping or pay yourself, it’s always a scam
- Gift cards. A victim is asked to buy gift cards and provide photos of their back and front to cover fees or fines, or return overpayment.
- Fake emails from a payment provider. A fraudster sends a victim an email that looks exactly like a regular payment alert from a legitimate bank. They claim that they sent the requested money for a product or a service and use the fake email as proof. The victim follows the instruction in the fake email and losses money, access to the account, or personal information
- Unexplained Overpayment. A fraudster sends a victim a significantly higher amount of money for a product or a service and asks to return the portion of the money. Then the order or payment gets canceled and the victim losses real money
- Asks to upgrade your payment account. Fraudsters send a fake email that confirms that a victim received money that will become available as soon as they upgrade their account. The upgrade costs money but they promised to be returned as soon as the process is over. In another variation, a sender pays for the upgrade and asks to refund money via an additional transfer or a gift card.
- Unexpected texts from a bank. Fraudsters send texts looking like real alerts from a bank and claim a suspicious transaction or a purchase happened. When a victim replies, fraudsters call them back and try to persuade them to do a transfer or provide security codes.
- Calls to recover stolen funds. Fraudsters call to new victims of payment scams and pretend to be a bank or a company that specializes in recovering stolen assets. They try to get more money from victims asking them to pay for the recovery services with guaranteed results
- Unusual Urgency. A fraudster invents an urgent situation, for example, the victim’s power will be cut off in 30 minutes if a bill is not paid immediately or an unauthorized transaction is happening in real-time and uses it to manipulate a victim
- Report the transaction to the bank or a payment system immediately
2. Submit additional reports to these websites:
3. If you paid a scammer using gift cards, try to notify the company that owns the card. In rare situations, they can refund money.
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More about fraud and investigations in the Investigator Blog.
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1yIt's always nice to see Oxana's digests! She provides a concise and clear idea without unnecessary verbosity! Expert's oriented, yet easy to understand for a common reader!