A Houston TikToker is issuing a warning about accepting Zelle payments from strangers as a means of business transaction.
The TikToker, @ogpdub, says he received a Zelle payment for a service he recently provided. However, after the customer reported the transaction as fraudulent, his Zelle account was shut down entirely. In fact, he filmed the video from a Chase bank branch.
“Be careful who you Zelle, and careful who you allow to Zelle you, alright?” he says. “Because once that person reports fraud, even though they actually—you gave them a service and you charged them and they gave you the money—they can report fraud and get your Zelle account shut down.”
“Now [you] don’t have a Zelle,” he says. “Now people are looking at you like you don’t have a bank account. It’s so embarrassing. I just went through it, man. So, like, be careful who you allow to Zelle you, alright? I’d rather Zelle you, before you Zelle me, because I know I’m not gonna report fraud. I have nothing to report fraud about. I’m paying you for something or giving you money for something, plain and clear. But people will use your account, finesse you, report fraud, and get their money back, and now you’re Zelle-less, alright? So be mindful of that.”
How to Report Fraud to Zelle
There’s some recourse for customers who report fraud, either through Zelle, your bank, or state/federal agencies. But his warning highlights a growing vulnerability in the growing gig economy for the people offering services. While Zelle provides some limited protection for buyers who report fraud, sellers have little recourse when customers exploit the system to get free goods and services.
In fact, if one looks around for answers, the general answer, per Norton, is that “Zelle doesn’t offer fraud protection for authorized payments. If you willingly send money to someone who turns out to be a scammer, there’s a good chance you won’t be able to recover the funds. The best way to protect yourself is to only send money to people you know personally, trust completely, and can verify independently.”
If you are the victim of chargeback fraud, you have a few options. However, there are also some reminders and exceptions to note.
For one, it is not recommended that people use Zelle for their businesses, except for peer-to-peer transactions, such as those on Facebook Marketplace. One reason for this is that Zelle does not have chargebacks or a dispute process. If a customer claims fraud, they must initiate a chargeback through their bank or card network.
Additionally, since no credit cards are involved, the transaction will not be protected under the Fair Credit Billing Act. It won’t be covered by Regulation E, which is part of the Electronic Fund Transfer Act, according to chargeback.io, 44% of chargebacks come from friendly fraud, which means the buyer makes a purchase and then claims fraud as an attempt to avoid paying. But then, both they (and the seller) would need to go through a process of providing evidence to back up their side.
Commenters: Be Cautious When Using Zelle
In the comment section of the TikToker’s video, many people made similar claims about being taken advantage of by others through Zelle.
“Yes, someone Zelle’d me and reported it fraud,” said one commenter. “My whole account got [shut down]. They took the money back and [mailed] me a check. Never again!!”
Even a banker said she doesn’t recommend Zelle unless you know that person well. “I am a banker and this is correct!” she said. “Please never Zelle or accept Zelle from someone you don’t know! I recommend money orders [and] cashier’s checks!”
Another banker asked, “Do you have any recommendations during the investigation process?”
“No, the back office will do a full investigation, but until than Zelle becomes complete blocked for the client,” she replied. “I’ve seen many time when customers change numbers. They even try to open a new account and cancel the previous account, but since your social [security number] is tied to the claim that doesn’t help. I always advise to NOT Zelle anyone. It’s very convenient, of course, to just pay someone specially for a service. But to save you form the headache and issues, I always suggest paper trail, which would be a check or a money order.”
All Hip Hop reached out to @ogpdub for comment.
@ogpdub Zelle don’t care either lol #fyp #zelle #fraud #scammers ♬ original sound – OG PDUB