In a matter of weeks, the NBC 5 Responds team heard from several North Texans who say they lost thousands of dollars when they believed they were responding to fraud alerts from their bank.
Read on to learn more about what happened and what you need to know to protect yourself.
“IT'S JUST VERY SCARY HOW QUICKLY YOUR MONEY CAN DISAPPEAR”
Jennifer Wade said she was on a playdate with her 5-year-old when she received a text that looked like a fraud alert from her bank.
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“'Did you authorize a $2,000 transfer?' I replied quickly, 'no,'” said Wade.
Then, her phone rang. The caller said he was with Wade’s bank.
“I said, ‘How do I know this is correct?’” Wade recalled asking.
“He said, ‘Check the number on the back of your Wells Fargo card. It's the same number.’ I just quickly glanced at it. Sure enough, it was the same. When I went back and looked there was one number difference,” Wade told NBC 5 Responds.
The caller convinced Wade a stranger had access to her account. The caller said Wade needed to move money out of her account using Zelle, a peer-to-peer payment service, owned by her bank and a consortium of six other large banks. It allows customers to send money instantly using an email address or phone number.
“I thought it was strange to move my money with Zelle, but it was within my own bank's app. I thought it would be safe,” Wade said.
The caller told Wade to enter her own phone number and name as the recipient and asked her to read back an authorization code. Wade lost just over $3,000.
“It’s just very scary how quickly your money can disappear,” Wade said.
CAN CONSUMERS GET THEIR MONEY BACK?
“People think it's associated with my bank, it's going to be safe to use, I'm going to be protected if something goes wrong,” said John Breyault, Vice President for Public Policy, Telecommunications and Fraud at the National Consumers League.
Breyault explains if someone hacks into your account and steals money, consumers should be entitled to reimbursement by the bank.
The Consumer Financial Protection Bureau said when a consumer tells a financial institution money was stolen from their account, the financial institutions would have to show the transfer was authorized by the consumer. The protections depend on the facts and circumstances of the transfer.
Breyault explains money transfer services like Zelle — convenient because they are fast — are tough to pull back.
“We hear from consumers on a regular basis who tell us they recognize, sometimes within minutes, that they've been defrauded. When they contact the bank, the bank looks at the transaction and says the money's already gone, there's nothing we can do,” said Breyault.
Wade disputed the transfers with her bank. She said Wells Fargo denied the claim.
Wells Fargo told NBC 5 Responds it can’t discuss specific customers due to privacy. When it’s notified about a scam, it has an investigative process and works with other financial institutions and law enforcement in an effort to track down suspects and try to recover funds.
Wells Fargo also wrote, “We are actively working to raise awareness of common scams and to remind customers that Zelle transfers are immediate, and should be treated just like cash. At the same time, we continue to update and strengthen our practices and procedures for combatting and helping prevent scams.”
Early Warning Services, the network operator of Zelle, told NBC 5 Responds, in part, “Zelle doesn’t offer a protection program for unauthorized payments, so only use Zelle to pay people you know and trust.”
It also said, “Part of our commitment is to inform and remind consumers that their bank or credit union will never call, email or text them to ask for sensitive information. They would not ask customers to transfer funds between accounts to prevent fraud. We do this through several communications initiatives—specifically partnerships and marketing.”
TIPS TO AVOID A SCAM
If someone calls and claims to work with your bank, hang up the phone and call the number on the back of your debit or credit card. That advice should ring true if you hear from someone who claims to be from the IRS, the Social Security Administration or another institution.
Wells Fargo shared the following to help consumers avoid a scam:
- Do not share your PIN, passcode, text message code, or any other access information to your accounts with anyone who requests it.
- Know that Wells Fargo will never ask you to send money to anyone, including yourself, to "reverse a transfer," "receive a refund," or anything similar.
- Don't rely on caller ID. Scammers can make calls and texts look like they're coming from Wells Fargo.
- If you feel uncomfortable or suspicious with any request you receive by phone, text, or email, hang up or don't respond. Reach out directly on our website or phone number, which you can find on the back of your debit or credit card or statement.
Zelle said it reminds consumers to only send money to those you know and trust. Treat Zelle like cash; always double-check the recipient’s correct U.S. mobile number or email address, so the money goes to the right person.
HOW TO REPORT A SCAM
If you believe you were scammed, the FTC says start by contacting the company or bank that issued the credit card or debit card to report the fraudulent charge. It may be too late to reverse the charges, but ask them to get your money back.
You can report the scam to the FTC and the Texas Office of the Attorney General .
The FTC offers additional steps here.
“SCAMMERS ARE HAVING A FIELD DAY”
Breyault explains criminals can target customers of any bank or payment system.
“Millions of consumers are at risk and the scammers are having a field day,” he said.
Wade questions if consumers have enough protections, “It’s been very eye-opening, but very frustrating.
She’s not alone.
“We are urging for an update to the regulations because these scams are growing and people need protection,” said Lauren Saunders, Associate Director at the National Consumer Law Center.
Editor’s note: Earlier, NBC 5 reported that when a consumer sends the money, even if they’re tricked, the Consumer Financial Protection Bureau still considers it an “authorized” transfer.
The CFPB asked NBC 5 to clarify, when a consumer tells a financial institution money was stolen from their account, the burden is on the financial institutions to show the transfer was authorized by the consumer. The protections depend on the facts and circumstances of the transfer.
NBC 5 Responds is committed to researching your concerns and recovering your money. Our goal is to get you answers and, if possible, solutions and a resolution. Call us at 844-5RESPND (844-573-7763) or fill out our customer complaint form.
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