SAN ANTONIO — Sondra Nuno of Center Point is no longer using Zelle. She sent someone she thought was a landlord $100 for an application fee. She soon found out there was no rental home and no refund from the app.
“They were just like sorry about that. You just got to be careful next time,” Nuno said.
There is usually no way to get your money back if you accidentally pay a fraudster with peer-to-peer payment apps. It is essentially a cash transaction and once the money is gone it is not coming back. That is because the transaction is considered an authorized payment, one you knowingly sent, even if you were tricked into it.
“The banks have claimed that because these are authorized, that they are not reimbursing the victims,” said Jason Zirkle with the Association of Certified Fraud Examiners.
Banks currently are responsible for refunding customers for unauthorized transactions.
“Meaning, let’s say somebody stole your credit card data, they went out and purchased something with your credit card data and you had nothing to do with it,” Zirkle said. “That’s considered unauthorized and the banks are liable for those to repay the customer.”
Zelle recently came under fire after Senator Elizabeth Warren issued a report this week on fraud experienced by customers. Zelle was created by the banks and many banks and credit unions offer the service. It can cause confusion with customers.
“They might feel a little more secure, but that’s kind of a false sense of security,” said Jason Meza with the Better Business Bureau.
“Because it’s tied into the banks’ software, that makes it more attractive to cyber criminals and people want to steal your money because they want access to your bank account,” Zirkle said.
There are two ways schemers can access your money.
First, fraudsters sometimes pose as your bank asking if you authorized a Zelle transaction. When you say no, you are told to reverse the charge.
“But they’re tricking you,” Zirkle said. “You’re not sending the money to yourself. You’re sending it to the scammer.”
Zirkle said to never Zelle money to yourself. It is a red flag for a scheme if anyone asks you to do so. Instead, call your bank directly if you get a notification about a Zelle transaction.
Or fraudsters impersonate legitimate businesses such as a landlord or utility company. They will ask for payment through Zelle.
“Schemers have found a way around user policies,” Meza said. “They found a way to gain access.”
Meza said the best way to use these apps is to transfer money only to people you know.
“Double check the person,” he said. “That you can contact them via phone, via email. Make sure they are a real person.”
Protect yourself by using a credit card instead because you can more easily get your money refunded. Know you can link a credit card to many of these apps but understand a peer-to-peer payment transaction will appear like a cash transfer on your credit card. There are hefty extra fees associated with those.
If you chose to use a peer-to-peer payment app, Nuno said to be choosy about what transactions you make with it.
“I would say definitely do your research because there are so many apps now that you can send money through and a lot of it is not traceable,” she said.
KENS 5 reached out to Zelle for comment and did not hear back.