Free payment services like Zelle let users easily send money between the bank accounts of family and friends. But Zelle’s popularity also makes it a target for scammers, with reports of peer-to-peer money transfer scams growing.
Fraud stories involving Zelle are now commonly reported by local news outlets, and Sens. Elizabeth Warren and Robert Menendez last week questioned Zelle’s parent company Early Warning Services about what it is doing to protect consumers or reimburse them for losses.
What is Zelle, and how are criminals using it scam money? Read on to learn how the instant payment service works, how to protect yourself from scams and what to do if the worst happens and you fall victim to Zelle fraud.
What is Zelle and how does it work?
Zelle is a peer-to-peer (P2P) payment service created by a consortium of major US banks, including Bank of America, Chase, Capital One and Wells Fargo. It charges no fees and works with almost 1,500 banks and credit unions.
Created to compete with other electronic payment services like PayPal, Venmo and Cash App, Zelle lets banks handle casual electronic transfers without paying any…
