PennyWise Episode 58: It’s Financial Literacy Month! Five easy steps to strengthen your finances
Zelle is a peer-to-peer payment network used by more than 1,000 banking apps. Like other P2P services, Zelle makes it convenient to send money to friends and family using their email address or phone number. But as convenient as it can be for you, it’s also that convenient for scammers who want your money.
Recently, Zelle’s been in the news because criminals are taking advantage of the platform to scam people into sending them money. Banks and credit unions are not responsible for money lost from P2P scams because people are knowingly making a payment themselves, unlike fraudulent transactions resulting from stolen credit or debit cards.
With Zelle, “your recourse options are very limited,” says Akeiva M. Ellis, co-founder of The Bemused, a financial literacy consultancy for young adults, and a Certified Financial Planner Board of Standards Inc. ambassador outside of Boston.
Here are a few tips to protect your money when using Zelle or any other P2P payment app, plus steps to take if you experience a scam.
1. Aim to use Zelle to pay friends and family only
Reserve Zelle and other money transfer apps for paying people you already know and trust, says Robert Burda, chief strategy officer and interim CEO of the nonprofit Cybercrime Support Network, whose work includes operating the nonprofit FightCybercrime.org as a resource for victims. “Once the payment’s sent, like cash, it’s gone,” he says.
When using money transfer apps, use the phone number and email address that you have on file. Be suspicious if someone you’ve been communicating with (and whose contact information you know) asks you to send the money to a different phone number or email address. That’s a sign that their account might have been hacked, says Ellis.
2. Raise a red flag on urgent payment requests
“In general, scammers are often creating a sense of urgency,” says Alexis Castorina, the head of consumer education at Zelle, who is based in Scottsdale, Arizona. Before making a payment, especially if you’re feeling rushed, think it through to see if it’s legit.
Someone might claim to be from a company you do business with (such as your utilities company) and threaten to shut off service if you don’t make a payment immediately. These sense-of-urgency and scare tactics are red flags, Castorina says.
3. Use caution if a service provider requests money through Zelle
Be wary of unexpected communications claiming to be from your bank or any service provider, says Ramona Maior, a CFP in the Phoenix area. Email addresses and phone numbers on caller ID can be “spoofed” or faked to look like they’re from your bank, for example, so don’t rely on what pops up on your caller ID or what an email sender’s name looks like at a quick glance.
If the person claiming to be from your utilities company or bank demands payment using a P2P service rather than your usual method of payment, let them know that you’ll call the company yourself to handle it. Look up the official phone number and reach out to confirm whether you do actually owe money and how you should send it.
4. Be wary if anyone insists on only using Zelle
“When people are really insistent on using Zelle, that’s a red flag for me, too,” says Ellis. If the person claims that payment options are Zelle or nothing, that’s a sign to do some research to make sure the person and transaction are legitimate.
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What to do if you’re a victim of a P2P payment scam
Despite your best efforts, scams are so prevalent and ever-changing that you might not be able to avoid one. Here are steps to take if a scam happens to you.
Report the scam
“We want individuals to immediately contact their financial institution,” says Castorina. “They can then do some further investigation to see what exactly has happened.”
Zelle app users can also report the scam to Zelle by calling the company’s customer service number or filling out a contact form on the company’s website.
It’s a good idea to report the scam to FightCybercrime and to the FBI. Doing so helps prevent others from being scammed, provides information that could be the missing piece of a bigger scam or trend, and helps build the case with lawmakers for better consumer protections, says Burda.
Seek out information
Learn about warning signs to look out for when using P2P services. ScamSpotter.org and government sites like MyMoney.gov offer information on how to keep your money safe.
Find support
Being victimized in a scam can cause people to feel distrustful of others, Castorina says. Counseling or peer support can help people not feel isolated in their experience.
Zelle and other P2P services are among the best ways to send money. But because funds are transferred directly and quickly to recipients’ accounts, and transactions don’t carry the same consumer protections as credit or debit card fraud, it’s critical to use them safely.
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EugeneEdge // Shutterstock
The internet can feel packed with scams sometimes, especially for anyone who’s had their credit card or other information stolen. But most scams fall into a small variety of types that are easy to identify and avoid once you know about them.
There are only so many ways to reinvent the wheel—scammers will usually fall into a set number of categories. Twingate assembled a list of common online scams that internet users should be wary of, drawing on research from government organizations, payment processors, and tech companies.
One of the major categories of scamming is called social engineering. An old-fashioned method that still works surprisingly well, social engineering is any fraud where a human being communicates with you to obtain information in person, online, or over the phone. Scammers will use manipulative, deceptive, or psychological tactics to get someone to reveal confidential information.
As our lives increasingly have shifted online, scammers have followed, posing as everything from fake online boyfriends to made-up charities. So the next time you get a voicemail claiming to be from Microsoft, an email that says your antivirus service is out of date, or a pop-up ad from “newy0rktimes.com,” take a few seconds and think about whether it's a genuine message before doing anything. Continue reading to learn about the most common online scams today.
EugeneEdge // Shutterstock
The internet can feel packed with scams sometimes, especially for anyone who’s had their credit card or other information stolen. But most scams fall into a small variety of types that are easy to identify and avoid once you know about them.
There are only so many ways to reinvent the wheel—scammers will usually fall into a set number of categories. Twingate assembled a list of common online scams that internet users should be wary of, drawing on research from government organizations, payment processors, and tech companies.
One of the major categories of scamming is called social engineering. An old-fashioned method that still works surprisingly well, social engineering is any fraud where a human being communicates with you to obtain information in person, online, or over the phone. Scammers will use manipulative, deceptive, or psychological tactics to get someone to reveal confidential information.
As our lives increasingly have shifted online, scammers have followed, posing as everything from fake online boyfriends to made-up charities. So the next time you get a voicemail claiming to be from Microsoft, an email that says your antivirus service is out of date, or a pop-up ad from “newy0rktimes.com,” take a few seconds and think about whether it's a genuine message before doing anything. Continue reading to learn about the most common online scams today.
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Tero Vesalainen // Shutterstock
Phishing is one of the most common online scams. It’s a form of social engineering, meaning a scam in which the “human touch” is used to trick people. One offline form of phishing is when you receive a scam phone call where someone claims to be calling from the fraud department at your bank and requests your account number as verification.
With online phishing, scammers do the same kind of thing but use emails and links to fraudulent websites to fool users. In your spam folder, you’ll often see messages claiming to be from Bank of America and others. These links lead to imitation bank sites designed to capture your personal banking information.
Tero Vesalainen // Shutterstock
Phishing is one of the most common online scams. It’s a form of social engineering, meaning a scam in which the “human touch” is used to trick people. One offline form of phishing is when you receive a scam phone call where someone claims to be calling from the fraud department at your bank and requests your account number as verification.
With online phishing, scammers do the same kind of thing but use emails and links to fraudulent websites to fool users. In your spam folder, you’ll often see messages claiming to be from Bank of America and others. These links lead to imitation bank sites designed to capture your personal banking information.
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richardjohnson // Shutterstock
These email messages are notorious—and the stuff of internet legend: “Hello sir, I have a huge sum to send you!” In this scam, a forlorn prince, bank manager, church reverend, or otherwise reputable-sounding stranger has a large amount of money that they need you to hold for them. All you have to do is send them several hundred or thousand dollars to cover some kind of transactional cost upfront.
Never believe any stranger who wants to send you money, and listen to your gut. If something sounds too good to be true, it is highly likely that it is a scam.
richardjohnson // Shutterstock
These email messages are notorious—and the stuff of internet legend: “Hello sir, I have a huge sum to send you!” In this scam, a forlorn prince, bank manager, church reverend, or otherwise reputable-sounding stranger has a large amount of money that they need you to hold for them. All you have to do is send them several hundred or thousand dollars to cover some kind of transactional cost upfront.
Never believe any stranger who wants to send you money, and listen to your gut. If something sounds too good to be true, it is highly likely that it is a scam.
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Tero Vesalainen // Shutterstock
Romance scams are one of the darkest and most sinister scams because of the time investment and emotions involved. Romance scammers pretend to be regular people, often older people, who are looking for love and want to meet eligible singles in other countries. They'll build an emotional connection with their target by exchanging romantic messages and pretending to be in love.
The scam comes in when, eventually, a series of misfortunes befall the romantic partner. They might plan a visit to finally meet—but suddenly won't have money to pay for the plane ticket. Then they’re hospitalized with a mystery illness and need money to pay the bill. This continues until the victim grows suspicious of the mounting costs.
Tero Vesalainen // Shutterstock
Romance scams are one of the darkest and most sinister scams because of the time investment and emotions involved. Romance scammers pretend to be regular people, often older people, who are looking for love and want to meet eligible singles in other countries. They'll build an emotional connection with their target by exchanging romantic messages and pretending to be in love.
The scam comes in when, eventually, a series of misfortunes befall the romantic partner. They might plan a visit to finally meet—but suddenly won't have money to pay for the plane ticket. Then they’re hospitalized with a mystery illness and need money to pay the bill. This continues until the victim grows suspicious of the mounting costs.
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Jacob Lund // Shutterstock
Formjacking is a web scam that works the same way as a credit card skimmer does in real life. You go to a website to place an order and enter your information as usual. The transaction even goes through and seems to be fine, except that some code hacked into the website has copied your financial data to someone else.
The owners of the website may not even realize something is happening because they don’t pay close attention to their infrastructure. Make sure the websites you deal with are secure.
Jacob Lund // Shutterstock
Formjacking is a web scam that works the same way as a credit card skimmer does in real life. You go to a website to place an order and enter your information as usual. The transaction even goes through and seems to be fine, except that some code hacked into the website has copied your financial data to someone else.
The owners of the website may not even realize something is happening because they don’t pay close attention to their infrastructure. Make sure the websites you deal with are secure.
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JMiks // Shutterstock
Phony tech support is a form of social engineering. This scam may come as an email or a phone call, claiming that your computer has been compromised in some way and that you must call a number or visit a website to fix it.
From there, the scammer may install malware like keyboard capture software (or worse). On the phone, they may request remote access to your computer to help you. These scammers often claim to be from Microsoft or Apple as a way to establish legitimacy.
JMiks // Shutterstock
Phony tech support is a form of social engineering. This scam may come as an email or a phone call, claiming that your computer has been compromised in some way and that you must call a number or visit a website to fix it.
From there, the scammer may install malware like keyboard capture software (or worse). On the phone, they may request remote access to your computer to help you. These scammers often claim to be from Microsoft or Apple as a way to establish legitimacy.
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aslysun // Shutterstock
Ransomware is a kind of malicious software that is installed without your knowledge. This is usually from an email or fraudulent site, meaning it also uses phishing to imitate your bank or another institutional website. Someone calls or emails with a link that installs the ransomware on your machine. What makes ransomware different is what comes next.
The software locks certain kinds of information on your machines, like your saved documents, photos, and other files. You have to pay to unlock the data and get your files, although the FBI cautions against actually paying.
aslysun // Shutterstock
Ransomware is a kind of malicious software that is installed without your knowledge. This is usually from an email or fraudulent site, meaning it also uses phishing to imitate your bank or another institutional website. Someone calls or emails with a link that installs the ransomware on your machine. What makes ransomware different is what comes next.
The software locks certain kinds of information on your machines, like your saved documents, photos, and other files. You have to pay to unlock the data and get your files, although the FBI cautions against actually paying.
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Rawpixel.com // Shutterstock
Scareware is a form of manipulative scamming that threatens users by making them believe they need new software on their machines. One of the common forms is to tell users they need new antivirus software and to offer that software from a fraudulent source.
It’s often easy to tell these websites or emails apart from real ones: Look closely at the URLs or email addresses, which usually have strange spellings or other clues that signal you’re not dealing with legitimate companies.
Rawpixel.com // Shutterstock
Scareware is a form of manipulative scamming that threatens users by making them believe they need new software on their machines. One of the common forms is to tell users they need new antivirus software and to offer that software from a fraudulent source.
It’s often easy to tell these websites or emails apart from real ones: Look closely at the URLs or email addresses, which usually have strange spellings or other clues that signal you’re not dealing with legitimate companies.
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Lopolo // Shutterstock
Sextortion is an especially grim crime that targets minors, although it can also affect adults. Now that so many people meet romantic partners online, it’s common to exchange explicit photos. That’s also true of teenagers or even of younger children, who can find themselves in online relationships with people who ask for personal information and photos.
Once someone has this material, they can use it as a way to demand more and will threaten to share info or post photos publicly if their target refuses. Unlike the other crimes on this list, sextortion doesn’t always have financial goals.
Lopolo // Shutterstock
Sextortion is an especially grim crime that targets minors, although it can also affect adults. Now that so many people meet romantic partners online, it’s common to exchange explicit photos. That’s also true of teenagers or even of younger children, who can find themselves in online relationships with people who ask for personal information and photos.
Once someone has this material, they can use it as a way to demand more and will threaten to share info or post photos publicly if their target refuses. Unlike the other crimes on this list, sextortion doesn’t always have financial goals.
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panuwat phimpha // Shutterstock
Crowdfunding and mutual aid are becoming more common as a way for people to share resources and help others pay for medical bills and other costs, or to donate following natural disasters. Unfortunately, this well-meaning way to help others in the community has also been targeted by scammers through charity and disaster fraud.
Scammers can make fake Twitter accounts to imitate people in need. They’ll even set up bots to make new accounts that look like your friend’s account to reply with Paypal links that redirect to the scammer. If you aren’t sure about the credibility of a group or crowdfunding page, it is always best to seek more information.
panuwat phimpha // Shutterstock
Crowdfunding and mutual aid are becoming more common as a way for people to share resources and help others pay for medical bills and other costs, or to donate following natural disasters. Unfortunately, this well-meaning way to help others in the community has also been targeted by scammers through charity and disaster fraud.
Scammers can make fake Twitter accounts to imitate people in need. They’ll even set up bots to make new accounts that look like your friend’s account to reply with Paypal links that redirect to the scammer. If you aren’t sure about the credibility of a group or crowdfunding page, it is always best to seek more information.
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SB Arts Media // Shutterstock
This scam is simple and it’s a variation of an age-old, real-life scam. Think of those signs you see on street corners that say, “I make $16,000 a month working from home!” When you call, these people want you to buy training materials to become a real estate agent or something similar.
The same is true of many online ads that say you can work from home and make $500 a day or some other attractive amount. The best advice is also the oldest: If it sounds too good to be true, it probably is.
This story originally appeared on Twingate and was produced and distributed in partnership with Stacker Studio.
SB Arts Media // Shutterstock
This scam is simple and it’s a variation of an age-old, real-life scam. Think of those signs you see on street corners that say, “I make $16,000 a month working from home!” When you call, these people want you to buy training materials to become a real estate agent or something similar.
The same is true of many online ads that say you can work from home and make $500 a day or some other attractive amount. The best advice is also the oldest: If it sounds too good to be true, it probably is.
This story originally appeared on Twingate and was produced and distributed in partnership with Stacker Studio.
