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Bottom Line Up Front

  • Zelle® makes it easy to send money to friends and family, but scammers also use the service to take advantage of unsuspecting users.
  • Always double-check the contact information of who you’re sending money to, and never transfer money to people you don’t know or trust.
  • Watch for questionable activity, including unexpected requests from Zelle® or your banking institution.

Time to Read

7 minutes

July 24, 2023

These days, sending money digitally is easier than ever thanks to payment services like Zelle®

Unfortunately, scammers also take advantage of this service’s convenience and speed to steal money from its users. Because money transferred via Zelle® is hard to trace and nearly impossible to recover, scams using Zelle® are common. 

In general, it’s recommended to only use Zelle® to send money to friends, family and other people you know and trust, like a babysitter. To be safe, you shouldn’t use the service to send money to people you don’t know, like an online retailer or a bidding site. That being said, scammers are known to use clever tactics to trick users. If you use Zelle®, it’s important to stay current on the latest digital payment scams and learn how to spot them, so you can protect your accounts.

6 Common Scams Fraudsters Use on Zelle®

Scammers have a variety of ways to trick people into sending them money through Zelle®. Typically, these scammers pretend to offer something in exchange for payment or impersonate a reputable source. Be mindful of these 6 common types of scams circulating on Zelle®:

  1. Fake sellers. Scammers may pose as sellers in online marketplaces and request payment through Zelle®. They’ll often boast about attractive deals or products and then disappear after you’ve paid them, so you’ve lost money and the item. One extremely common form of this is the “puppy scam.” Scammers pretend to be a breeder selling puppies. They might use stock images or lie in order to receive payment for a puppy you’ll never see. This scam is also commonly seen when buying concert tickets or other digitally transferred items. 
  2. Phishing/impersonation. Phishing scammers may send emails, text messages or phone calls impersonating Zelle® or a financial institution. They trick users into sharing personal information like login credentials or account numbers, which they use to access the account and perform fraudulent transactions. They may tell you that your account has been compromised and to protect your remaining funds, you need to transfer out your money; or that a transaction is on hold pending account verification; or that your credentials are needed to unlock your account after a suspicious login attempt. Finally, scammers pretending to be utility companies or government agencies will threaten cutting off service, or fines and even arrest if you don’t send money through Zelle® right away. Make sure you stay on guard.
  3. Overpayment scams. In overpayment scams, scammers will send a large amount of money to you unprompted. Then, they’ll ask you to refund the overpaid amount via Zelle®. Since the initial payment is usually fraudulent, victims end up losing their own money when the scammer’s initial payment is reversed and the Zelle® payment goes through.
  4. Job scams. Fraudsters may post fake job listings (often “work-from-home opportunities”) and claim that you need to pay a fee or deposit through Zelle® or provide personal information to secure the position or for necessary training or equipment. These scammers often communicate exclusively through text message. You may end up losing money or becoming a victim of identity theft.
  5. Rental scams. Some scammers pose as landlords or property owners and request rental or deposit payments through Zelle®. They may list properties that don't exist or aren't actually available for rent, then disappear once they have your money.
  6. Prize/charity scams. Scammers may contact you claiming you’ve won a prize or saying they represent a charitable organization. They ask for donations or fees to claim the prize, but it’s all to trick you into sending money through Zelle®.

How to Spot a Scam on Zelle®

Scams on Zelle® are common, but that doesn’t mean you have to become a victim. There are many ways to protect yourself and spot the scam before sending money.

Here are some red flags to look out for:

  • Forced urgency from the person you’re speaking with. If they want you to act right away and refuse to answer questions, it might be a scam.
  • Any texts, emails or other messages that have incorrect spelling or grammar. Many scammers imitate legitimate-looking email addresses or messages but include extra periods, misspellings and other inaccuracies.
  • Text messages from a full 10-digit phone number confirming a transaction or asking you to update account information via a link. Most banking institutions, including Navy Federal, will only text you from a short 5-digit code and will never include a link.
  • Messages from Zelle® or your bank claiming your account was compromised and asking you to make a payment to prove your identity or reverse a fraud charge.
  • Unexpected requests from a seemingly legitimate organization (like a government agency or bank) to send money to someone you don’t know.
  • Any communication asking you to send money to yourself. Scammers can spoof your Zelle® account to make it seem like you’re paying your own account, but you aren’t.
  • Messages from Zelle® asking you to pay to upgrade your account or pay for a “Zelle® Business Account.” Zelle® will never solicit money via email or phone calls, and an upgraded account is never needed to send or receive funds via Zelle®.
  • An unexpected request for money from someone you personally know or recognize. Speak with them first to make sure the request is legitimate.

Above all, it’s important to trust your instincts. If you receive a message or payment request that doesn’t seem right, double-check the information and reach out to the person or organization directly to verify. Never click on suspicious links, provide login information or agree to random payment requests from Zelle® or your banking institution.

Protect Your Finances From Scammers

Scammers have gotten clever, but you can outsmart them when you know how to protect your accounts from fraud or theft. Remember: Navy Federal will never ask you to send money via Zelle® for any reason. In fact, most reputable businesses or organizations won’t use Zelle® for legitimate transactions. Keep an eye out for signs of scams and only use Zelle® to send money to people you know and trust.

If you think you’ve been a victim of a Zelle® scam, reach out to us right away so we can help you secure your accounts. It’s also a good idea to use Navy Federal’s account security options, including setting up mobile banking notifications, to get notified of every transaction and spot fraud that much faster.

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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.