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Understanding Fraud & Scams

As a consumer, it’s important to understand how fraud and scams are defined because there may be differences in the consumer protections offered by your bank or credit union. A basic way to differentiate fraud and scams is unauthorized vs. authorized transactions.

FRAUD

If someone gained access to your bank account and made a payment with Zelle® without your permission, and you weren’t involved in any way with the transaction, this is typically considered fraud since it was unauthorized activity. If someone gained access to your account, and stole money or sent it without your permission, this could be defined as fraud. Immediately report suspected unauthorized activity to your financial institution. Because you did NOT authorize a payment, you are typically able to get your money back after reporting the incident.

SCAM

If you were knowingly involved in the transaction and you gave the “ok” and authorized a payment to be sent, this is typically defined as a scam. Even if you were tricked or persuaded into authorizing a payment for a good or service someone said they were going to provide, but they didn’t fulfill it, this would be considered a scam. Because you authorized the payment, you may not be able to get your money back. A few types of scams reported involve purchasing tickets, buying puppies and other financial scams like cash flips. Get more examples of scams.

Contact Your Financial Institution for Possible Recourse

Contact your bank or credit union immediately if you feel you’ve been the victim of fraud or have been scammed. In cases of unauthorized payments, consumers have legal rights and protections under the Electronic Funds Transfer Act (also known as "Reg E”). It’s important to read the user service agreement and the account agreement with your financial institution to understand the terms of any payment service you intend to use.

Resources & Tips for Safe Payments

How to Pay it Safe with Zelle®

Zelle® is a fast, safe and easy way to send money to friends and family. It’s similar to cash. So you want to make sure you use it to pay only people you know and trust, like your roommate, your dad or your babysitter. Not people you don't know, like that stranger on the internet selling suspiciously inexpensive puppies from a place you've never heard of. Look for Zelle® in your banking app, and pay it safe out there.

Digital payments continue to grow across the U.S. And with issues like identity theft and other cybercrimes on the rise, it’s important to know what you can to do help protect yourself – and your money - when sending and receiving money digitally. One of the easiest ways to protect yourself is to only send money to people you trust.

Here are some other things you can do:

1. Update your security settings: Change your security settings to enable multifactor authentication — which is a second step to verify who you are, like a text with a code — for any accounts or services you use that support it. For example, social media sites, online and mobile banking, credit cards, utilities and more.

2. Sign up for text or email alerts offered by your bank: Most banks and credit unions warn of suspicious activity on your account. Sign up for account alerts, and contact your bank immediately if you suspect unauthorized activity.

3. Steer clear of phishing calls and emails: Fraudsters today are using more sophisticated email and phone techniques to gain access to your information. Fraudsters spoof calls and send emails that look like they are from your bank. Beware of clicking links in emails, and never provide any information over the phone if someone stating they’re from your bank calls you. Hang up and call your bank at the phone number listed on the back of your bank-issued debit card or on the bank’s official website if you must provide information over the phone. Learn more about fraud and scams.

4. Don’t share personal details online: Avoid sharing your location, home address, phone number and other personal information across social media. Check your settings and permissions on each social platform, and activate any additional security features available, like two-factor authentication. Also, don’t accept friend/connection requests from people you don’t know.

5. Use strong passwords: Don’t use the same password for every site. Tools like Last Pass and KeePass will securely store your passwords so you don’t have to remember dozens of them. And, it goes without saying, but don’t share your passwords with anyone!

6. Beware public Wi-Fi: Using the free public Wi-Fi at your favorite neighborhood coffee shop may save you some gigabytes on your data plan, but it can come with risks. If you do choose to log onto the coffee shop’s free Wi-Fi guest network, make sure you don’t log onto any secure sites, such as your mobile or online banking sites.

Using Zelle® Safely

No sensitive account details are shared when you send and receive money with Zelle® – only an email address or U.S. mobile number tied to a bank account in the U.S. Authentication and monitoring features are in place to help make your payments secure, but, pay it safe: Only use Zelle® with people you trust, and always make sure you are using the correct mobile number or email address!

Here’s how to pay it safe:

1. Only send money to those you trust: Zelle® should only be used with friends, family and others you trust. Why? Because you can’t cancel a payment once it’s been sent, if the recipient is already enrolled with Zelle®. And if you send money to someone you don’t know, or you do not get what you expected, you may not get your money back.
2. Treat Zelle® Like Cash: While Zelle® and cash are certainly different, both provide the recipient with fast access to the money you send. With Zelle®, money moves directly into the enrolled recipient’s bank account within minutes¹. And again, once you authorize a payment to be sent, you can’t cancel it if the recipient is already enrolled.
3. Beware of payment scams: If an offer sounds too good to be true, it probably is. For example, a stranger selling online concert tickets at a steep discount and insisting you pay with Zelle® may be a scam. Zelle® does not offer a protection program for authorized payments, so pay it safe. Only send money to people you personally know and trust.
4. Confirm your recipient's contact information: Make sure you have the correct U.S. mobile phone number or email address for the person you want to send money to. When in doubt, contact your friend to double check. If you authorize a payment to be sent to the wrong person, you may not get your money back.
5. Understand your payment options: If you don’t know a person or aren’t sure you’ll get what you paid for, using your credit card may be a better payment option. Many credit card companies offer built-in buyer protections for cardholders. Check the terms and conditions of your credit card to see what’s offered. Unlike a credit card, Zelle® does not offer a protection program for any authorized payments made with Zelle® – for example, if you do not receive the item or the item is not as described or as you expected.