The free payment app Zelle is making headlines these days but for all the wrong reasons.
Every week, it seems there is a new report of someone getting scammed out of thousands of dollars.
"I was contacted by someone from a Wells Fargo phone number that told me they were a Wells Fargo representative and that I had fraud," said Megan MacDonald, a scam victim.
MacDonald received a text that appeared to come from her bank. Panicked, she have her account information and lost $3,000 through a Zelle transfer.
Last year, Carina Brown fell victim to the same text.
"It said, did you try to Zelle 5,000 dollars, and I said no," Brown said.
She gave her account number and lost $1,000.
Damon Lander was another victim.
"They changed my user name, my password, my card PIN, set up a Zelle account," he set.
Zelle is run by major banks and is actually very safe from hacking. But in almost all cases, customers are convinced through a phone call to give their personal account information to a scammer.
Sarah Wetzel with the Better Business Bureau said scammers know peer-to-peer payment services like Zelle and Venmo are convenient, but unlike credit cards, there's little fraud protection.
"It's the same old scams that we see. It's just they're asking for payment in different ways," Wetzel said.
She said to look out for these red flags:
- The person contacting you is pushy or aggressive
- They insist there's no other way to fix the problem.
- Their message has grammatical errors.
"These peer-to-peer payment services are not going to shoulder any losses for a consumer. If you do get scammed out of money the chances of you getting that back is very unlikely," Wetzel said.
So how do you keep this from happening to you?
Only use money transfer apps with people you know. And if the person needs your account information, look up the bank's phone number yourself and call them.
Chances are that when you call, your bank will say there is nothing wrong, and that way you don't waste your money.