Zelle...little Heads Up

[GApeachy]

I guess I'm behind the times but I'll share a little heads up for those of you, like me, that haven't been aware about the lack of protection via Zelle....

As recent as yesterday another friend has had their bank acct. wiped out via Zelle fraud.  This is the second WF bank checking customer I know of that was informed neither will recoop those funds.  This latest fraudulent transaction from yesterday actually sent a fraud alert via text to this person asking if she approved a transfer to "name inserted" in which she immediately answered 'NO' and immediately called WF Fraud Dept.  Unfortunately an additional 2 more transactions were processed until all of their (her and dh) funds were 100% depleted. Thousands of dollars....gone!

WF fraud dept. told her that Zelle is not covered by Fraud Protection since these were wire transfers and Zelle doesn't provide Fraud Protection. I thought FI's would cover such but they don't.

I just unenrolled Zelle from all of my accts. since it's new to me and haven't needed it.... yet.  Some FI's you have to call to unenroll and other's you can unenroll via portal.

I guess if you really need to use Zelle it might be a good idea to transfer money to acct(s) immediately before the transfer request is submitted, otherwise you may not want to leave monies in acct(s) enrolled in Zelle.  

[Brian_Earl_Spilner]

Sorry, misread. You typically need access to the account to send money.

[GApeachy]

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@Brian_Earl_Spilner wrote:

Sorry, misread. You typically need access to the account to send money.

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Yes and after reading about some of the scams happening recently the text message may have been the scam.  She may have given access via that text message...perhaps?  She did reply to that text message but by the time she had a human on the phone from WF there had been 3 transaction and it was too late.  Maybe WF does not send text messages about Zelle transfers to being with...so perhaps that's key. (the SCAM) 

I'll try to get more info. as to what she did exactly...if she did more than just reply 'NO' before calling the WF Fraud Dept.

[tcbofade]

Ummm.  Wells Fargo is insured by the FDIC aren't they?

All funds on deposit with Wells Fargo are guaranteed.

If your friends did not authorize the transactions, Wells Fargo IS liable and responsible for resolving the issue.

[FinStar]

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@tcbofade wrote:

Ummm.  Wells Fargo is insured by the FDIC aren't they?

All funds on deposit with Wells Fargo are guaranteed.

If your friends did not authorize the transactions, Wells Fargo IS liable and responsible for resolving the issue.

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@tcbofade 

An item to keep in mind, Zelle is a P2P digital network platform for money transfers, not an institution. So, while digital scams have been on the rise, even replying to an unathenticated/unvetted text message or email can inadvertently set things in motion.

Also, from the Zelle FAQs (excerpts):

https://www.zellepay.com/financial-education/pay-it-safe/using-zelle-safely

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.

And, an older article regarding Zelle fraud protection:

https://techcrunch.com/2018/02/16/zelle-users-are-finding-out-the-hard-way-theres-no-fraud-protectio...

[tcbofade]

I understand that Zelle is not responsible... but the funds were on deposit with Wells Fargo.

...doesn't that mean that the funds are secured by the FDIC?

[DaveInAZ]

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@tcbofade wrote:

I understand that Zelle is not responsible... but the funds were on deposit with Wells Fargo.

...doesn't that mean that the funds are secured by the FDIC?

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Well, somebody sure as heck needs to be repsonsible, the person was a victim of fraud. And if Zelle says "Zelle® does not offer a protection program for authorized payments", those clearly were NOT "authorized payments". 

I tried Zelle once and didn't like it, sending money via a mobile # to me is just asking for problems, and now with SIM swap fraud???. I was pretty sure the one time I tried was when Bank of America offered me a $10 bonus to use it. So I logged into my BoA account and found it. Then I found a terms of service which had a a "I do not agree" button which disabled it. Good riddance. 

[crystal626]

Zelle doesn't have fraud protection if you initiate the transfer and get ripped off. It's a completely different matter if these were unauthorized transfers made without her knowledge. Wells Fargo is responsible and needs to be reminded of that. 

[FinStar]

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@crystal626 wrote:

Zelle doesn't have fraud protection if you initiate the transfer and get ripped off. It's a completely different matter if these were unauthorized transfers made without her knowledge. Wells Fargo is responsible and needs to be reminded of that. 

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No one is denying the transactions were due to fraud, however, the Wells Fargo T&Cs (as related to the Zelle service) clearly outline specifics in Section 9. So, it's something the individual would need to pursue by filing a police report (or the appropriate authorities) and depending what WF may recommend as far as steps to recover their funds, if anything. Had this occured on a Debit Card, checks or a CC issued by WF, then those offer different protections when it comes to fraud or unauthorized use.

https://www.wellsfargo.com/online-banking/transfers/zelle-terms/

[Brian_Earl_Spilner]

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@tcbofade wrote:

I understand that Zelle is not responsible... but the funds were on deposit with Wells Fargo.

...doesn't that mean that the funds are secured by the FDIC?

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Here's an article on the subject. Wells Fargo is the bank mentioned. It explains the bank's reasoning behind not reimbursing victims.

https://www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html