Zelle®: Fraud vs Scams
Understanding the definitions of fraud and scams is essential for customers, as the consumer protections offered by banks can differ significantly. Recognizing these distinctions helps customers better navigate their rights and the remedies available to them. Knowing these differences ensures customers can effectively protect themselves and respond appropriately if they fall victim to financial deception.
Fraud vs Scam: What’s the Difference?
In simple terms: fraud and scam are determined by what kind of permission the person who has your banking information obtained. It’s a matter of giving someone authorization vs. not having authorization on your transactions!
FRAUD
Example: Let’s say someone gained access to your bank account without permission. You notice a charge on your bank account at a restaurant you’ve never visited before. You will never involved in this transaction - that makes you a victim of fraud.
If someone accesses your bank account and made a payment with Zelle® without your consent and authorization, and you weren’t involved in the transaction, this a usually a form of fraud since it was activity that you did not authorize as the account holder..
Make sure you report any unauthorized activity to your bank!
In most cases, you typically are able to recover the money lost!
SCAMS
Example: You see a listing online for someone pretending to sell puppies. You used Zelle® to pay the person online and they never schedule a time for you to meet and all communication ceases without seeing or receiving the puppy. This is a common example of an online scam.
When you’re involved in a transaction and you gave someone a “yes” and authorized payment to be issued - this is defined as a scam. Despite being mislead for a service or a good that someone agreed to provide, because you gave consent and agreed to pay someone you might not be able to get your money back.
A few common scams that are currently happening are people selling tickets, puppies, and other financial scams.
Remember: contact your bank right away if you suspect you’ve been the victim of fraud or have been scammed. When there’s unauthorized payments, consumers have legal rights and protections under the Electronic Funds Transfer Act (Reg E). It’s important to read the service agreement and the account agreement with your bank.