Kate Pospisil, CFE
ACFE Communications Specialist
It is common these days to sell items we no longer need on online marketplaces such as Craigslist and Facebook Marketplace. It’s easy, local and usually fast. The process is further simplified through the use of peer-to-peer (P2P) payment methods such as Venmo, PayPal and Zelle. However, this ease to buy and sell can attract fraudsters looking to make a quick buck. I personally use Facebook Marketplace frequently and when I recently sold my treadmill, I experienced a scam attempt firsthand.
First-hand look at the red flags
Now, I am no stranger to scam attempts, and I design my posts to prevent this as much as I can: I clarify Venmo or cash only (with a Venmo hold), I only provide my address after the payment or hold is sent, I don’t generally share my phone number etc. I listed my treadmill on Facebook Marketplace and within one minute, I had a message regarding the post; it was through Facebook Messenger, but from an Instagram account. This man wanted to pay in full immediately and pick up the next day, but he wanted to pay with Zelle. I refused and said Venmo only, but I eventually relaxed a bit figuring it was not much different — in some ways it might even better since money sent via Zelle goes directly into a bank account, whereas Venmo and PayPal go into their own accounts. After all, he was sending the full amount with no questions or counteroffers. I gave him the number attached to my Zelle account; however, he then requested my email address, saying it’s easier to find the account that way. I’m not terribly familiar with Zelle, so I gave him my email address and told him I’d need a minute to make sure it’s attached to the account. Before even confirming the email with Zelle, I received an email… from Zelle.
At this point, I realized this was a scam attempt and all the prior red flags were much more obvious. I told the fraudster that it felt suspicious and that I would be calling my bank. He hurried to assure me that “this happens to him all the time,” it’s “because [I] don’t have a business account.” He said repeatedly that he would just transfer me the additional $400, then I could send it back and the hold would release on the original transfer. However, Zelle allows personal accounts to send and receive up to $2,000 a day, so that clearly was not the issue here, meaning I would end up transferring $400 and receiving nothing. I thanked him for giving me the basis for my next fraud blog and blocked him, then rushed to check my bank account and make sure it was unscathed. After confirming all was well on my end, I reported him and began mentally outlining this blog.
This fake/false payment scam is only one of the frauds perpetuated through Zelle. In fact, Zelle is being questioned by senators regarding how it responds to its many cases of fraud. Even though Zelle is owned and operated by banks, banks are claiming no responsibility when it comes to fraud committed using their app.
Another common scam is when a fraudster pretends to be the bank and contacts the victim to alert them about a fraudulent transaction. The fraudster then scams the victim by encouraging them to “return” the money to themselves using Zelle, but the fraudster has already intercepted their bank account. Because the victim is initiating and approving the fraudulent transfer, the bank declares it not fraudulent, leaving the victim out of money and options. Many victims of this scheme have only been reimbursed after going to the media with their stories.
Protecting yourself as a user
Online payments through apps such as Zelle are easy to use and serve a valid purpose in today’s digital society. However, as easy as they are to use, they also give fraudsters an easily accessible path to steal your money. The following are some basic tips to help keep you safe, but always remember to remain vigilant.
1. Never transfer money to someone you would not hand a $100 bill to — once you send the money, it is gone, and there is very little you can do to get it back in the case of fraud.
2. Know the requirements and stipulations for the system through which you are transferring funds.
3. Be suspicious about text messages from your bank — do not click links, open attachments or enter personal account information.
4. If you receive a phone call from your bank regarding an online transaction or P2P payment, end it and call the number on the back of your bank card.
5. Report any scam attempts to Zelle.
SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners