Scammers are taking to Zelle and defrauding users by pretending to be legitimate vendors. Unlike PayPal, Zelle does not offer fraud protection - instead operating more like Venmo, which is intended for peer-to-peer payments with people you know (rather than paying merchants). Zelle is proving to confuse customers, thinking that being backed by banks means the service has tighter fraud protections than it currently does.
These are not isolated incidents. The banks are doing nothing to help victims of Zelle scams and seem to have no legal obligation to do so. Instead, they’re saying because the buyer “authorized the transaction,” there’s nothing they can do to help recoup the stolen money. What consumers don’t realize is that Zelle is actually more like Venmo than PayPal – meaning it’s only meant to be used for peer-to-peer digital payments with people you trust, like friends and family. Just like Venmo, Zelle does not offer fraud protection for buyers or sellers on its transactions.