The latest craze in trying to steal your money is Zelle Fraud. Most people think that because it is through the bank that it is safe. It is. The TRANSFER is safe. The problem comes when you initiate it and it goes where its not supposed to go, the responsibility is yours.

Zelle Fraud

Zelle fraud is really no different than wire fraud. If you, the client of the bank go ahead and send a scammer money, that is on you. In a recent article, a banking customer sent money though Zelle and thought the bank should have insured it. Um…no. The bank will not insure something you do on your own. Here are some of the differences you need to be aware of.

As a bank customer, it’s important to understand how fraud and scams are defined because there may be differences in the consumer protections offered by your bank or credit union. A basic way to differentiate fraud and scams is unauthorized vs. authorized transactions.


If someone gained access to your bank account and made a payment with Zelle® without your permission, and you weren’t involved in any way with the transaction, this is typically considered fraud since it was unauthorized activity. If someone gained access to your account, and stole money or sent it without your permission, this could be defined as fraud. Immediately report suspected unauthorized activity to your financial institution. Because you did NOT authorize a payment, you are typically able to get your money back after reporting the incident.


If you were knowingly involved in the transaction and you gave the “ok” and authorized a payment to be sent, this is typically defined as a scam. Even if you were tricked or persuaded into authorizing a payment for a good or service someone said they were going to provide, but they didn’t fulfill it, this would be considered a scam. Because you authorized the payment, you may not be able to get your money back. A few types of scams reported involve purchasing tickets, buying puppies and other financial scams like cash flips.

Contact your bank or credit union immediately if you feel you’ve been the victim of fraud or have been scammed. In cases of unauthorized payments, consumers have legal rights and protections under the Electronic Funds Transfer Act (also known as “Reg E”). It’s important to read the user service agreement and the account agreement with your financial institution to understand the terms of any payment service you intend to use.