Zelle Fraud: How to Protect Customers and Brands

The most common attack strategy is impersonating a financial institution and targeting its customers with phishing messages. The customer receives an SMS text message explaining an error with their account or transaction. Typically, these imposter scams will include links or lead to phone calls where fraudsters can continue their scams.

Fraudsters will also attempt to steal an individual’s login credentials.  If successful, they can take over the Zelle account and send money to another account. Account takeover attacks can be financially devastating.

Payment or refund scams persuade individuals that their Zelle account has an error and instruct them to “send another payment to themselves” to correct the mistake. The fraudster creates a second “spoofed” account that impersonates the target’s original account. When the transaction is complete, the target gives their money directly to the fraudster.

Facebook Marketplace is an online bazaar where shoppers can buy and sell personal items. On this platform, Zelle fraud can target both buyer and seller accounts. Buyers commit fraud by using Zelle to facilitate payment for an item, explaining they can’t meet or pay in person. After the payment, they submit confirmation of a fake payment with Zelle. In another scenario, a seller posts a phony product for sale on the marketplace and demands upfront payment through Zelle before sending the item or meeting. Once payment is received, the fraudster removes the listing and severs contact with the buyer.

Prize scams are common on the internet. In these scams, a target is informed that they have won the lottery or a valuable prize. To claim their winnings, they are told to submit a Zelle payment to cover associated fees.

Fraudsters typically find their targets on dating sites and social media, communicating and building rapport with them in preparation for a romance scam. Once the relationship is established, the fraudster pretends to have a crisis that requires immediate financial support and requests a Zelle payment for the money transfer.

Fraudsters notify their targets of a “too-good-to-be-true “ investment opportunity that they must act on immediately to secure their position. Payment can be made conveniently through the Zelle app.

These scams typically occur in two ways. In the first, a fraudster deceives the target into applying for a fake job opportunity. In the second, the fraudster impersonates a company the target has already used. Typically, the target is asked to pay for training materials or other fees during the interview process.

Charity scams capitalize on a target’s empathy. After a disaster or crisis, fraudsters send phishing messages to promote a fake charitable organization, raising money to benefit victims. They will promote false narratives and use emotional appeals to convince their target to send money through Zelle.

Similar to brand impersonation attacks, a fraudster assumes the persona of a trusted friend or family member and asks for a Zelle payment. This is another form of imposter scam.