Zelle is a safe way to send and receive money, but beware of scammers

pregnant woman making online payment with phone and credit card
When you’re sending money to a trusted recipient, Zelle is a safe option.

  • Zelle is safe, as long as you know and trust the person you’re sending money to.
  • Once you authorize a payment, it’ll go through, and there’s no form of fraud protection.
  • Zelle runs through your personal bank’s digital infrastructure, so it’s as secure as your bank.
  • Visit Insider’s Tech Reference library for more stories.

There’s no shortage of peer-to-peer digital payment apps; in 2017, Zelle joined the ranks of services like PayPal and Venmo as a simple way to send and receive money via your mobile device. Unlike the alternatives, though, Zelle is backed by hundreds of banks and directly transfers money between accounts in minutes.

That speed – and its status as the “official” digital payment system built into many banking apps – makes it a target for criminal activity, which has led some experts to question the app’s overall safety.

Zelle is safe if you know who you’re sending money to

Zelle was built by banks and was engineered to be safe. “Zelle is safe because it uses data encryption which offers users increased protection. From a privacy perspective, it’s safer than alternatives, like Venmo and Cash App, since it’s harder for scammers to access users’ personal information,” said Nishank Khanna, chief marketing officer at Clarify Capital.

But some well-publicized incidents of fraud are a cause for concern, and Zelle’s consumer protection isn’t especially robust if things go wrong.

The biggest drawback of Zelle is that it doesn’t offer fraud protection for authorized payments. In other words, if you purchase something online and use Zelle to pay for it, you have no recourse if you never receive the item you paid for.

For example, if you use Zelle to purchase an item from Craigslist, and it turns out you were scammed, Zelle won’t refund you. Thus, Zelle advises that you only use the service to pay people you absolutely know and trust.

Zelle app
To send money on Zelle, you need to enter the recipient’s phone number or email – but make sure you trust them.

Ted Rossman, a senior industry analyst at CreditCards.com said, “The key with Zelle is to only send money to people you know and trust. Once the money is sent, it’s gone. There’s no pending status, no chargeback mechanism, no buyer protections of any sort. If you send money to the wrong person, you’re basically at the mercy of that stranger to send it back.”

In fact, some criminals try to capitalize on that. “Some scammers deliberately encourage you to pay them via Zelle with the intent of stealing your money. If someone you don’t know is requesting a payment via Zelle, I’d suggest declining,” Rossman said.

But you’re not entirely without protection. In many cases, it all comes down to whether you authorized the transaction; if you did, you’re not protected. But unauthorized transactions are usually fully reimbursable.

“Zelle’s ease-of-use can also make it possible for malicious parties and fraudsters to use social engineering to acquire Zelle credentials,” said Tom Kelly, president and CEO of consumer privacy company IDX. Social engineering is when a scammer lies about their identity or goal to trick victims into giving them personal information.

Criminals have used social engineering to contact victims and request the two-factor code that Zelle requires to set up accounts. In situations like this, criminals can easily set up a Zelle account on their own device using a victim’s credentials.

You can defend yourself against these types of attacks the same way that you defend yourself from phishing attacks, malware, and other social engineering attacks: Keep your data and personal information secure, don’t divulge info to people you don’t know, and make your passwords unique and strong.

online shopping laptop with credit card
Never hand out your payment info to an individual you don’t know.

How to use the Venmo mobile app to make or receive paymentsIs PayPal secure? How the service protects your transactions, credit card data, and more‘How secure is my password?’: How to test the strength and security of your passwords using an online password-security tool‘Why is my PayPal money pending?’: 5 reasons why PayPal holds funds, and how to expedite your transaction

Read the original article on Business Insider

People are lining up in droves after rumors spread that billionaire Jack Ma is giving out cash to Chinese seniors

jack me alibaba ant group
Jack Ma in China in 2019.

  • Online rumors in China are claiming that Alibaba billionaire Jack Ma is giving away money.
  • The gifts are said to be made in honor of Lunar New Year, but authorities warn it may be a scam.
  • Ma, through his companies, has previously given millions in LNY gifts to customers.
  • Visit the Business section of Insider for more stories.

Chinese seniors are lining up at banks across the country after rumors swirled online that reclusive billionaire Jack Ma was giving away pieces of his fortune, UPI reported,

Many began lining up at banks across Fuzhou, in the Jiangxi Province, after a WeChat group claimed that Ma was giving away 200 Chinese yuan – the equivalent of $30 – to anyone 60 or older who could show proof of age. 

The gift was said to be in honor of Lunar New Year, which began on February 11 and is observed until February 17. During that time, the country generally shuts down, and gifts of money are exchanged in special red envelopes meant to bring prosperity in the new year. 

But authorities warned seniors not to trust rumors about a potential gift, and the Fuzhou Municipal Public Security Bureau issued an emergency notice warning citizens of a possible scam.

Ma has in the past offered special deals and promotions during Lunar New Year, largely through Alibaba and its subsidiary companies. In 2014, Ma’s Alibaba issued 99,999 online coupons to users via WeChat, worth around 990,000 yuan, or $153,000. In 2016, Alipay, the mobile payment branch of Alibaba, gave away US$120 million in a TV promotion. And in 2018, Alibaba offered a “digital red envelope” AR game, paying out around US$820 million to customers. 

Ma, the founder of Alibaba and Ant Group, has scarcely been seen in public over the past three months, though he was reportedly spotted golfing at a luxury golf resort on the island province of Hainan last week. 

Ma disappeared from public life at the end of last year after Chinese authorities cracked down on his business empire in November and launched an anti-trust investigation into Alibaba in December.

Read the original article on Business Insider