How to Avoid Zelle Scams, Plus What to Do If You Can’t

Scams using Zelle and other peer-to-peer payment services are popular. Learn how to protect your money and what steps to take if you experience a scam.
Apr 28, 2022

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Zelle is a peer-to-peer payment network used by more than 1,000 banking apps. Like other P2P services, Zelle makes it convenient to send money to friends and family using their email address or phone number. But as convenient as it can be for you, it’s also that convenient for scammers who want your money.

Recently, Zelle’s been in the news because criminals are taking advantage of the platform to scam people into sending them money. Banks and credit unions are not responsible for money lost from P2P scams because people are knowingly making a payment themselves, unlike fraudulent transactions resulting from stolen credit or debit cards.

With Zelle, “your recourse options are very limited,” says Akeiva M. Ellis, co-founder of The Bemused, a financial literacy consultancy for young adults, and a Certified Financial Planner Board of Standards Inc. ambassador outside of Boston.

Here are a few tips to protect your money when using Zelle or any other P2P payment app, plus steps to take if you experience a scam.

How to protect your money when paying with Zelle

Here are four best practices to follow when sending money with Zelle.

1. Aim to use Zelle to pay friends and family only

Reserve Zelle and other money transfer apps for paying people you already know and trust, says Robert Burda, chief strategy officer and interim CEO of the nonprofit Cybercrime Support Network, whose work includes operating the nonprofit FightCybercrime.org as a resource for victims. “Once the payment’s sent, like cash, it’s gone,” he says.

When using money transfer apps, use the phone number and email address that you have on file. Be suspicious if someone you’ve been communicating with (and whose contact information you know) asks you to send the money to a different phone number or email address. That’s a sign that their account might have been hacked, says Ellis.

» Check out the pros and cons of the top P2P apps

2. Raise a red flag on urgent payment requests

“In general, scammers are often creating a sense of urgency,” says Alexis Castorina, the head of consumer education at Zelle, who is based in Scottsdale, Arizona. Before making a payment, especially if you're feeling rushed, think it through to see if it's legit.

Someone might claim to be from a company you do business with (such as your utilities company) and threaten to shut off service if you don’t make a payment immediately. These sense-of-urgency and scare tactics are red flags, Castorina says.

3. Use caution if a service provider requests money through Zelle

Be wary of unexpected communications claiming to be from your bank or any service provider, says Ramona Maior, a CFP in the Phoenix area. Email addresses and phone numbers on caller ID can be “spoofed” or faked to look like they’re from your bank, for example, so don’t rely on what pops up on your caller ID or what an email sender’s name looks like at a quick glance.

If the person claiming to be from your utilities company or bank demands payment using a P2P service rather than your usual method of payment, let them know that you’ll call the company yourself to handle it. Look up the official phone number and reach out to confirm whether you do actually owe money and how you should send it.

» Know your payment options: Understand why and when to use online bill pay

4. Be wary if anyone insists on only using Zelle

“When people are really insistent on using Zelle, that’s a red flag for me, too,” says Ellis. If the person claims that payment options are Zelle or nothing, that’s a sign to do some research to make sure the person and transaction are legitimate.

What to do if you get scammed on Zelle or another P2P service

Despite your best efforts, scams are so prevalent and ever-changing that you might not be able to avoid one. Here are steps to take if a scam happens to you.

1. Report the scam

“We want individuals to immediately contact their financial institution,” says Castorina. “They can then do some further investigation to see what exactly has happened.”

Zelle app users can also report the scam to Zelle by calling the company’s customer service number or filling out a contact form on the company’s website.

It’s a good idea to report the scam to FightCybercrime and to the FBI. Doing so helps prevent others from being scammed, provides information that could be the missing piece of a bigger scam or trend, and helps build the case with lawmakers for better consumer protections, says Burda.

2. Seek out information

Learn about warning signs to look out for when using P2P services. ScamSpotter.org and government sites like MyMoney.gov offer information on how to keep your money safe.

3. Find support

Being victimized in a scam can cause people to feel distrustful of others, Castorina says. Counseling or peer support can help people not feel isolated in their experience.

Zelle and other P2P services are among the best ways to send money. But because funds are transferred directly and quickly to recipients’ accounts, and transactions don’t carry the same consumer protections as credit or debit card fraud, it’s critical to use them safely.

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