Zelle Fraud Explained
Since the launch of Zelle in June of 2017, the digital payments platform has become the largest US peer-to-peer network by total payments sent. Zelle is now responsible for twice the payment-flows of its next largest standalone competitor.
With nearly $500 billion in P2P transfers made through Zelle last year alone, the platform has become a big target for fraud. Because of this, both Zelle users and banks that offer the Zelle payments system to clients must be on alert.
Criminals have discovered that Zelle provides a streamlined opportunity to steal funds from bank customers and have them almost instantly transferred into their own illicit accounts.
Their methods are not only working, but they’re also deviously efficient.
Here’s how they do it…
A criminal will email, text or call a bank customer pretending to be an employee of the institution’s fraud department. On the call, or in the written message, the “fraud” rep will tell the customer they’ve been a victim of financial fraud and must take steps to halt any funds transfers.
The criminals then push the customer into completing a “Zelle refund” to stop the suspected criminal withdrawal from transferring out of the victim’s account.
Once the “Zelle refund” is complete, funds ARE transferred out of customer accounts and into criminal accounts in near real-time. The entire scam takes only minutes to accomplish.
In view of the fact that this fraud is perpetrated under the guise of stopping fraud, it’s pure evil.
Now, because of fears of reimbursement fraud, many banks are refusing to refund their defrauded customers. Banks are seeing their own clients as potential criminals.
This means both the banking customer and the bank itself have been defrauded, leaving both parties suspicious of one another. Obviously, this is terrible for business.
If you’re a bank or other financial institution that offers Zelle to clients, you must employ state-of-the-art anti-fraud systems that can detect Zelle fraud in real-time as it occurs.
Since this fraud is a double-edged sword for banking institutions, steps must be taken immediately to mitigate fraud losses AND ensure customer loyalty.
Discover the artificial intelligence-based fraud tools that could help detect and prevent Zelle fraud, at ToolCASE.com
Not only does your bottom line depend on it, your loyal banking customers demand it.
If you’ve been a victim of Zelle fraud, learn what steps you should take to assure a refund, HERE