Insidious Zelle Money App scams target NJ consumers
More than $490 billion in money transfers were processed by Zelle money payment app in 2021, and while the vast majority were legitimate and secure, the number of scams using the app has been rising.
By some estimates, 18 million Americans were the victim of money transfer scams in 2020.
In Jersey City on Tuesday, several New Jersey victims told their stories.
Alex Carranzana says he was scammed out of $600 bucks trying to buy football tickets.
Mary Powell says she was taken by an increasingly common scam, someone promising to help her get a refund from a seemingly bogus Amazon purchase.
The victims were joined by New Jersey U.S. Sen. Robert Menendez, D-NJ.,. and New Jersey Citizen Action in trying to hold the big banks behind the Zelle app to greater account.
Menendez wants the banks to proactively do more to protect consumers.
Often, when a victim reports they have been scammed to their bank using a money transfer app, they are told there is nothing the bank can do because the consumer authorized the sending of funds.
That differed from other types of consumer fraud involving bank accounts and credit cards, where consumer protections are greater and often the consumer has some recourse to recover the money that was stolen.
Menendez wants the Consumer Financial Protection Bureau (CFPB) to update rules protecting consumers from banking scams to include money transfer apps.
Zelle has pushed back hard on changing the current consumer protections, and claims they constantly remind users of the app to only send money to "trusted recipients." They claim constant reminders and alerts through the transfer process give the consumer ample time to reconsider any transfers, and the option to cancel a transfer if the recipient is not yet enrolled with Zelle.
Menendez and consumer advocates claim that is not enough given the sophistication of the scammers who often impersonate the legitimate financial institutions that back the Zelle app.
So far, the CFPB has not moved to update consumer protection rules and does not seem poised to do so.
Menendez is a member of the Senate Banking, Housing and Urban Affairs Committee, and hinted if banks do not take voluntary action to protect consumers, he will seek to force them to do so through legislation.
In the meantime, it's still "consumer beware."
What to watch out for
The most common scams typically involve a text message alerting you to some type of irregularity.
The message can appear to be from your bank, and alerting you to a possible fraudulent charge. The message may include a link to dispute that charge, but once you click it, it takes you to the scammer's website and asks for personal data to verify your account.
Similar scams may ask you to call a particular phone number. The scammer is on the other end and tries to convince you to transfer their money to fix the dispute.
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