According to a report from Sen. Elizabeth Warren, Massachusetts, banks are reluctant to reimburse customers for cash lost due to fraud and scams on the Zelle app.

Zelle claims that it is possible to get a reimbursement for money lost in unauthorized transactions. However, you might not be able to get a refund if you are tricked into authorizing transactions (scams). Warren’s office reports that banks are reluctant to give refunds in both cases, possibly because they violate federal law.

The key takeaway: It is important to be able to recognize and avoid scams when using Zelle and other peer-to-peer payments apps. You should also know how to quickly report fraud and scams.

Avoid common scams

Warren’s report claims that 90% of customers who were tricked into paying Zelle money are not eligible for refunds by the banks she studied.

Beware of scams like these:

  • Scammer. A representative pretending to work for a bank, utility, or government agency asks for payment in exchange for a fine or late bill. You will be asked to pay the bill using Zelle in order to resolve the problem.
  • Scammer. Someone offering you anything, from concert tickets to adorable puppies, requires that your payment be made with Zelle. You will never receive the item you have paid for.
  • Scammer known as “Pay Yourself”. Someone pretending to be from your bank asks you to send money using Zelle. Then, with your assistance, they will enroll your bank account with Zelle. The money that you thought was going to your bank account is now going to the account of the fraudster.

How can you protect your money

Peer-to-peer payments apps are not guaranteed to return your money if it is sent to the wrong person, even if it is a fraud.

Safety-first approach:

  • Only send money to people you trust and know. You cannot cancel a payment if the recipient has enrolled in Zelle.
  • Treat payments as cash. Money is transferred to the recipient’s account in minutes according to Zelle. You can’t cancel a payment that you have authorized as long as the recipient has enrolled.
  • Be wary of phishing emails and calls. Before you respond to someone claiming they are from a company, agency or organization, make sure you do your research. Be wary of suspicious-looking texts and emails that contain links. Your smartphone could be infected by harmful code found in links.

What to Do if You’ve Been Duped

Reporting scams helps law enforcement and government agencies to root them out.

Make a complaint to…

  • Contact your bank or financial institution immediately if you suspect you have been defrauded or scammed. Banks are required to reimburse customers for illegally taking money from their accounts. This is known as Regulation E. Keep in mind that the facts of each case will determine whether or not you are paid.
  • Government agencies. Report fraud to the Federal Trade Commission at if you have been scammed by a mobile payment app. Scammers can also be reported to the FBI’s Internet Crime Complaint Center.
  • Zelle. To protect others from being scammed, Zelle will report any Zelle scams to the recipient’s financial institution. Zelle requests that you call (844) 425-8542 for any unauthorized transactions.