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Scamola, Scamarooni, Scamarama, Fraud Central with Zelle

Photo of Gene Wunderlich

Over the years I’ve written so many articles on fraud schemes from the sublime to the ridiculous, that I should set myself up in a little side hustle of my own. Fortunately, or unfortunately, I’m just not that smart. Or unscrupulous. But the world abounds in people who get up every day and go to work with the sole objective of cheating you out of your money. 

Another scam was recently brought to my attention by a friend who was trying to sell something on Facebook Marketplace. If you haven’t availed yourself of that particular pleasure yet, take note of what you are likely to encounter. Within just a few hours my friend had received numerous offers to purchase items. Every, EVERY, offer to purchase was fraudulent. EVERY. SINGLE. ONE! And every offer followed the same pattern – we’ll Zelle you the money right away. 

If you’re not yet familiar with Zelle, Zelle is an online payment service that allows users to send and receive money directly to their bank accounts. Unlike platforms like Venmo and PayPal, Zelle doesn’t have an in-app wallet, but instead facilitates transfers directly into and out of bank accounts for faster payments.

While this feature is understandably quite convenient, it does lend itself to abuse from scammers. Because the funds go immediately into, or in the case of scams out of, your bank account, and there’s little recourse for getting it back when fraudulent situations arise.

Facebook Marketplace is particularly primed for this type of transaction since it’s geared to facilitate purchases by and from strangers. Two ways this works – the ‘buy’ side. You see something you like listed for sale in Murrieta. You follow up with the seller who requests that you Zelle payment to them. How about PayPal? Venmo? No, they don’t have those accounts (probably because those payment sources feature in-app wallets with some anti-fraud measures that may allow you to reclaim your money). Zelle us the money and you can pick the items up this afternoon at 4. Once you hit ‘send’ on your bank account, say goodbye to your money because somebody out there, probably far away from Murrieta, is now enjoying your hard earned cash, probably along with similar amounts from other victims in other cities. 

How to avoid? Some marketplaces require sellers to be certified or have a government ID for verification. You can also request to pay cash or provide Zelle when you are physically at the pick-up site with the product in front of you. You’ll find that a lot of these opportunities dry up if you offer cash upon pickup.  

The ‘sell’ side, as my friend experienced. The fraudster will ‘Zelle’ you a payment with an official looking notice to your email. The email will notify you that the payment has been made BUT there’s a little problem. Your Zelle account is not a business account so can’t currently accept the size of payment that’s being held for you. In order to complete the process so you can receive the money, you’ll need to ‘expand’ your account limit or establish a business account. 

How do you expand your limit or establish a business account in order to receive the money already on hold for you? Why, that’s simple. Say you’ve been notified that you’ve received a payment of $750 that’s on hold until you expand your account. In order to do that, send the Buyer $500 (or some amount) in order to increase your account limit, or $250 to establish a business account, whereupon you will be credited the entire amount – the original $750 plus the $500 expansion fee. Oh, and a second email may arrive advising you not to cancel the transaction or your account may be frozen for 14 days. 

Now if you’re following along, you’ve probably already guessed that there was no $750 on hold for you to begin with and your $500 ‘expansion’ fee is winging its merry way to who knows where. 

How to avoid? If you’re selling a product there is NO reason to EVER be sending someone money. If they can’t figure out how to send you the money for your product in an easy and comprehensible way, that should be a red flag. Most individual accounts may or may not have limits on how much you can send, but not on how much you can receive. If you need to send more than your daily limit allows, simply contact your bank and they’ll make it happen. While most banks now offer the Zelle service, few provide it for business accounts. Don’t know why that is but it’s something to note in these fraud situations. 

There are currently numerous scams involving Zelle out there right now including a rental property scam, a takeoff on the old rental property scam from years ago now with the added convenience of online money transfer. There a ‘fake job’ scam, a ‘charitable request’ scam, phishing scams and more. As I mentioned last month, these scams have always been around but with today’s online access and instantaneous money transfer, they have just morphed into more sophisticated ways to separate you from your money.   

The most important thing to remember is that if a stranger wants you to send money through Zelle, for any reason, make sure you have some assurances that you’ll receive what you’re paying for. And if it’s too late, contact your bank immediately to see if they can help. Zelle has established an online fraud reporting feature at Zellepay.com that provides a means to report the problem so they can attempt to stop future occurrences through the system. But again, your bank and Zelle can only respond once the deed is done and your money is gone. Be proactive, be smart, don’t be a victim. If it’s too good to be true…

Written by Gene Wunderlich, Sr. Staff Writer

Prior to his retirement in 2021, Wunderlich served on a number of local non-profits and boards. He spent the past decade as a legislative advocate for the housing and real estate industries as well as a coalition of local Chambers of Commerce advocating on behalf of small and local businesses.

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