Used Zelle to pay scammer? Little-known law could get your money back

CHARLOTTE — Catherine Woods said it started with a text. She said she thought it was from her bank, so she responded. Then, the scammer called.

“The guy sounded so legitimate. He introduced himself as somebody from the fraud department,” she told Action 9′s Jason Stoogenke.

She said he had spoofed the bank’s phone number. “I think a lot of people, like me, we trust the fact that on your phone it comes up as Wells Fargo and it is the number of your bank,” she said.

She said the caller said someone had breached her account, so she had to create a new one and transfer money there before any more damage was done.

“They’re good. They’re good at what they do,” she said.

She says he even walked her through the steps using Zelle and walked the money right into his own account. She’d rather not say how much.

“I had sent every dime in my checking and savings account,” she said. “It’s devastating. You know, holidays are coming up. It’s a horrible feeling and, particularly the fact that I did it. That I was so naive and trusting.”

Zelle and banks including Wells Fargo offer fraud protection for unauthorized transactions, but not for authorized ones. In other words, if you willingly hand over money — like Woods did — that’s your responsibility.

However, there is a federal law called the Electronic Fund Transfer Act that can help, specifically the part called “Regulation E.”

The way the Consumer Financial Protection Bureau sees it, if someone “induced” you into transferring the money — even if, technically, you agreed to it — your bank has to reimburse you.

The bureau even gives some examples, including one which sounds just like Woods’ story.

Wells Fargo says it won’t discuss Woods’ case for privacy reasons, but that it’s investigating. However, on Friday, Woods told Stoogenke the bank called her and agreed to reimburse her.

Advice for using Zelle (no matter what bank you use):

• Only transfer money to people you know and trust.
• Don’t answer a text or call, even if the Caller ID says it’s your bank; scammers can “spoof” that number. If you have questions, call your bank directly.
• You may want to open a separate account, keep a small balance in there, and use that account for Zelle payments; this way, in the worst-case scenario, you won’t lose that much.

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