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Zelle is like cash. And like cash, it has the same problem. Once you give it, you can't demand it back without courts.

hot_gril 3y ago
The common Zelle scams I've heard of rely on how Zelle doesn't work like cash. It is possible to reverse Zelle payments, but only in very specific circumstances like compromised bank creds. So the scammer will manipulate you into giving a clean, irreversible payment in exchange for a dirty one that later gets reversed. It's also a lot easier to send like $5K to some faceless entity with Zelle than with cash.
- randyrand 3y ago
  TIL! Tricky.
  - soneil 3y ago
    I assume everyone's familiar with the overpayment scam - it's probably the second most common cheque scam after simply passing bad cheques in the first place. You're accidentally paid too much, and are asked to return the remainder, or pass it on to someone else. Then the original cheque bounces and you're out product plus the remainder you passed along. This version relies on banks being required to make "funds available" in a timeframe that's often shorter than how long it takes a cheque to actually clear - so you can dig yourself into a hole before the cheque finally bounces. The zelle version is essentially the same thing. Someone "accidentally" sends you a sum, and being a nice, reasonable person, you return it. The problem is this isn't a rollback; you don't (can't) revert their transaction - you create a second transaction. So when the source of the original transaction turns out to be fraudulent - and as the parent post says, fraudulent can be reverted, the house always wins - that first transaction is reverted. The second, where you "returned" their overpayment, is an entirely distinct transaction and needs to be fought separately. And it's a much harder fight to win, because it doesn't involve the house winning. (And yes, this could be almost entirely mitigated by having a user-facing return/revert/refund function that undoes the original transaction instead of creating a second.)
    - hot_gril 3y ago
      I've heard of that scam, and there are variants where you're not "undoing" a transaction but sending another one in some way. I think it needs to be made clear to customers that transactions are never final.

The common Zelle scams I've heard of rely on how Zelle doesn't work like cash. It is possible to reverse Zelle payments, but only in very specific circumstances like compromised bank creds. So the scammer will manipulate you into giving a clean, irreversible payment in exchange for a dirty one that later gets reversed. It's also a lot easier to send like $5K to some faceless entity with Zelle than with cash.

randyrand 3y ago
TIL! Tricky.
- soneil 3y ago
  I assume everyone's familiar with the overpayment scam - it's probably the second most common cheque scam after simply passing bad cheques in the first place. You're accidentally paid too much, and are asked to return the remainder, or pass it on to someone else. Then the original cheque bounces and you're out product plus the remainder you passed along. This version relies on banks being required to make "funds available" in a timeframe that's often shorter than how long it takes a cheque to actually clear - so you can dig yourself into a hole before the cheque finally bounces. The zelle version is essentially the same thing. Someone "accidentally" sends you a sum, and being a nice, reasonable person, you return it. The problem is this isn't a rollback; you don't (can't) revert their transaction - you create a second transaction. So when the source of the original transaction turns out to be fraudulent - and as the parent post says, fraudulent can be reverted, the house always wins - that first transaction is reverted. The second, where you "returned" their overpayment, is an entirely distinct transaction and needs to be fought separately. And it's a much harder fight to win, because it doesn't involve the house winning. (And yes, this could be almost entirely mitigated by having a user-facing return/revert/refund function that undoes the original transaction instead of creating a second.)
  - hot_gril 3y ago
    I've heard of that scam, and there are variants where you're not "undoing" a transaction but sending another one in some way. I think it needs to be made clear to customers that transactions are never final.