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A struggling student made a $2,500 Zelle mistake. Can we fix this?

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Michelle Couch-Friedman

Consumer reporter and ombudsman

College student Shlome Goldenberg made a shockingly expensive but not at all uncommon, Zelle mistake. While attempting to repay a loan to a friend, he sent $2,500 to a complete stranger by accident. Worse, when he asked Chase Bank to refund the payment, he learned for the first time that voluntary Zelle transactions aren’t reversible. 

Panicked, Goldenberg did as the Chase representatives advised. He emailed the stranger on the other side of his Zelle mistake and asked him to send back the money. When the recipient of this misdirected cash drop agreed to return the $2,500, Goldenberg breathed a sigh of relief. 

It turns out that relief was premature. 

Two months later, Goldenberg’s $2,500 is still M.I.A. The stranger to whom he mistakenly Zelled the money insists his bank did send back the money. Chase says there is no record of the transfer. 

That leaves Goldenberg, a college student on a tight budget, empty-handed and still owing his friend $2,500.

With that money on the line, he’s begging Consumer Rescue for help.

He hopes we can track down his cash so he can repay his debt and be released from this cash app nightmare. But with Zelle’s terms and conditions of use not on his side, this mistake might just be an expensive lesson.

Or maybe not… 

Let’s find out.

Borrowing cash from a friend and repaying it with Zelle

Several months ago, Goldenberg borrowed the cash in question from his friend who, for privacy reasons, we’ll call John Smith. Just after the holidays, he was ready to repay the loan.

“My friend told me to send the $2,500 back to him with Zelle,” Goldenberg told me. “I didn’t know a lot about the app, but it seemed like an easy way to send the money back.”

And it would have been had Goldenberg been more attentive to the Zelle transaction he was about to complete. Instead, things were about to go very wrong very quickly. 

“[John] gave me his Zelle account handle,” Goldenberg recalled. “It’s just his name with a yahoo email address.”

When Goldenberg typed “John Smith” into the Zelle app on his phone, he clicked on the top result. A warning screen appeared and asked him to double check and make certain the correct person was listed as the recipient. 

The name on display was John Smith.

Everything looked ok, so I clicked confirm. Within seconds I got a confirmation from Chase that I had just sent $2,500 to my friend. I was happy to have been able to repay my loan and start out the new year right.

But Goldenberg had not, in fact, just paid off the loan to his friend. Instead, he had mistakenly sent money to a total stranger – also named John Smith – through the Zelle app.

He didn’t know it yet, but that error put his $2,500 in great jeopardy.

Not a great way to start out the New Year at all.

Surprise! You just Zelled the wrong person $2,500

Soon after Goldenberg received the confirmation of the successful Zelle payment, he called his friend. 

“I wanted to let him know I had sent the money back and that we were all clear now. But he told me that no money had been credited to his Zelle account from me,” Goldenberg explained. “When I checked my Chase account the $2,500 was already gone. I thought it was weird, but I wasn’t that worried yet.”

Feeling a bit confused, Goldenberg double checked his Zelle app. He could see that his money was successfully transferred to his friend’s account. Assuming there was a delay with the payment, he waited a bit and then called John again.

Still nothing. 

Goldenberg had heard that Zelle was a quick and easy way to send money to friends and family. This was turning into anything but quick and easy. 

He was starting to wish he had just sent his friend a check.

Chase: Zelle transfers can’t be reversed

Zelle payments are instantaneous and irreversible bank-to-bank transfers. When you send money via the Zelle app, your cash is immediately removed from your bank account and delivered to the recipient’s account. 

Fact: It isn’t possible to cancel a Zelle transfer after you click “send,” unless the person on the other side has not yet created a Zelle account. 

In this case, Goldenberg’s friend already had an established Zelle account. Had Goldenberg selected the correct John Smith in the app, the $2,500 would have immediately become available to him.

Realizing that the Zelle transfer was taking too long and that something had gone wrong, Goldenberg called Chase.

That’s when he learned just how easy it is to create a financial disaster with the Zelle app if a user is not attentive.

A Chase agent explained that Goldenberg had successfully sent his money – but to a stranger – also named John Smith. This person uses a Gmail address and Goldenberg’s friend uses a Yahoo address. 

And because of privacy laws, no further information about the receiver of Goldenberg’s funds would be shared. Chase had no intention of reversing the Zelle transaction. He was on his own to fix his mistake and track down his money.

“I couldn’t believe it,” Goldenberg says. “Chase basically told me there was nothing they could do for me. I could contact the other guy on my own, but they weren’t going to get it back for me.”

Frustrated, he hung up the phone and composed an email to the other John Smith – the one with his $2,500.

“I made a mistake, please just send the money back with Zelle.”

When Goldenberg sent the first email asking for his money back, he wasn’t very familiar with Zelle.

He is now. 

But like many Zelle users who accidentally send money to the wrong person, he was woefully unaware of the dangers of the app. Primarily he did not know that no mechanism exists to protect Zelle users from their own mistakes. 

He was still unaware of the full magnitude of his error. In fact, Goldenberg was still under the impression that a quick note to the alternative John Smith would result in his money sailing right back into his bank account.

So, naively he sent an email to the stranger and told him how desperate he was to have his money back. He asked this John Smith to please quickly send the cash back via the Zelle app right away. Goldenberg also pressured Smith to share the identity of his bank and his phone number. 

That urgent message with requests for personal information understandably set off alarm bells for the other John Smith. 

Returning a wayward Zelle payment isn’t straightforward

If you’re a regular reader of my column, then you know I’ve been covering Zelle mistakes and scams for years. I’ve responded to thousands of distraught pleas for help from Zelle users. 

Tensions are often high for the recipient and the sender in these situations with both sides becoming suspicious of the other

That suspicion is rooted in the Venmo Chargeback Scam which involves five steps:

  1. A thief steals a credit card.
  2. That criminal quickly sends money via Venmo (another instant money transfer service owned by PayPal) to a stranger by “accident” funding it with the stolen credit card.
  3. The scammer then contacts the recipient in a panic and asks for the money back. Usually a sad tale about the purpose of the money is included and the plea is urgent. 
  4. The sympathetic victim sends the money back to the scammer’s Venmo account. 
  5. Soon the actual owner of the stolen credit card reports the fraudulent charges on Venmo and the original transfer to the victim is reversed. 

By then, of course, the thief has closed up shop and is long gone – with the victim’s money in his pocket. 

Why a credit card chargeback scam isn’t possible on Zelle

But the Venmo Chargeback Scam is not possible on Zelle because payments can’t be funded with a credit card. A thief who has stolen a credit card can’t conduct this type of scam on Zelle.

Zelle payments are bank to bank transfers which are not protected by the Fair Credit Billing Act. The FCBA allows consumers to dispute fraudulent charges on their credit cards. Since there are no credit cards involved in a Zelle transaction, there is no way to reverse these payments. 

But don’t get me wrong. There are certainly a plethora of scams associated with Zelle, but a stolen credit card and chargeback scheme isn’t one of them. 

The recipient of Goldenberg’s $2,500 was well aware of the many scams associated with Zelle. And he believed that Goldenberg’s insistence to send the money back instantly through the Zelle app was a giant red flag. 

Ask the bank for help 

This stranger told Goldenberg he would send back the money, but not through Zelle. He wanted to ask the bank for help. When the young college student balked, explaining that he really needed the cash back ASAP, Smith forwarded him several articles I had written about Zelle.

That’s how Goldenberg learned about Consumer Rescue.

One of the articles that Smith sent to him was the disturbing tale of the woman who had accidentally Zelled her car repair payment to a stranger. That recipient was a reader of mine who wasn’t sure if the sender was a scammer or not. She wanted to return the money, but she didn’t want to put herself at risk of being scammed.

That story had a lot of twists and turns – including the big reveal that the Zelle payment had been mistakenly sent by a woman featured on the National Geographic documentary show “Locked up Abroad.” She had spent several years in prison for drug smuggling.

But in the end, she had left her life of crime in the past and had simply made a typo in the address field on the Zelle app. I helped safely facilitate the return of the car repair payment and all was well.

After reading that article, Goldenberg called me in desperation one afternoon. He hoped I could help him too.

Asking Consumer Rescue for help fixing this Zelle mistake

The first time I heard from Goldenberg was just days after he made his colossal Zelle mistake. He was still reeling from the potential loss of his $2,500. As he described his predicament, desperation oozed through the phone. 

“I really need that money back. It was just a little mistake. Please help me. Take my case. This was an innocent mistake. The guy has the same name as my friend,” he pleaded. “Now he has the $2,500 and I still owe my friend that money. I need help. This person won’t even tell me the name of his bank or his phone number. Can you help me!?”

Although I was sympathetic to his situation, Goldenberg’s story is one I’ve heard at least a thousand times since I first started reporting on the perils of Zelle. 

The “just a little mistake” comment is a narrative that almost always accompanies these 100 percent avoidable complaints about Zelle.

That commentary always strikes me as odd. It’s not a little mistake to transcribe one number, one letter, or to use the wrong email provider. These are all massive mistakes when it comes to Zelle. The information in that recipient field on the Zelle app must match your intended receiver exactly

Not almost, exactly. 

One incorrectly added digit, number, or email provider will take the cash out of your account and send it into the unknown. And because of privacy laws, neither your bank nor Zelle will tell you exactly where your money went. 

Don’t believe me? Just ask Yuriy Petriv…

A new phone number causes an irreversible $5,000 Zelle disaster

A month before Goldenberg’s phone call, I began receiving desperate requests for help from Petriv. His mistake was double the size of Goldenberg’s; having Zelled $5,000 to a total stranger. That fiasco came about after he sent money to a phone number that used to belong to his friend. 

“I didn’t realize the phone number I had saved in Zelle for my friend was an old number,” Petriv told me. “I clicked on the number and I guess I didn’t look at the name.”

Click.

And the money was gone. Just like that it was sent to someone who most certainly was not Petriv’s friend. 

When Petriv contacted Consumer Rescue he had already been trying to get his money back for several weeks. The person who had received his $5,000 had no interest in returning the money. In fact, after Petriv called this guy’s number one too many times, the stranger disconnected the phone and changed his Zelle address.

Can a Zelle user really just keep a cash windfall received by accident?

Because of the super-size of this mistake I decided to break my self-imposed moratorium on investigating Zelle complaints. 

I asked our Chase executive contact to have a look at Petriv’s situation and his team soon launched an investigation. Several weeks later, the verdict was in. The news wasn’t good and what I learned is troubling.

According to my Chase executive contact, the receiver of Petriv’s money is also a customer of Chase. The bank has emailed, called and sent a hard copy notification to this person alerting him to the fact that the $5,000 he received via Zelle was the result of another customer’s mistake. 

But that stranger, who is of course known to Chase, has ignored all attempts by the bank to facilitate the safe return of Petriv’s money.

He appears to be viewing the $5,000 as a windfall and doesn’t intend to give up his prize – and the bank isn’t going to force the refund. 

Because this person refuses to engage with Chase about the $5,000, the bank has now closed the case. 

Permanently.

That one second of inattention using the Zelle app cost Petriv $5,000.

Why won’t banks reverse Zelle mistakes?

In my discussion with our Chase executive, he explained why the bank can’t force the return of misdirected Zelle payments. 

The bottom line is that although many of these types of complaints are the result of a simple mistake, a significant percentage aren’t.  

In fact, some scammers will buy things on Facebook MarketPlace, Craigslist or elsewhere and pay using the Zelle app. After they receive the item, they’ll report the Zelle transfer as unauthorized in an attempt to get their money back and keep the item. 

Because of the irreversibility of Zelle payments, this scam has varying levels of success for criminals. But we’ve seen this plan successfully implemented via the PayPal platform many times. (See: Here’s why you should never give an eBay buyer your home address.)

The banks would have to hire an army of customer service representatives to thoroughly investigate the volume of Zelle mistakes that are reported on a daily basis. Since that isn’t going to happen, that leaves the responsibility of using the app properly on the consumer. 

Which of course makes sense. The Zelle app can be used safely, but not in a rushed or haphazard way.

Personal responsibility 

Every single Zelle mistake I’ve reviewed over the years could have easily been avoided had the user just slowed down and carefully reviewed each screen. 

Of course, people make mistakes. Everyone does. But when there are multiple screens warning a Zelle user to double check their information and the user disregards those screens, these “mistakes” drift right into the realm of  irresponsibility on a platform with no safety net if the alerts are ignored. 

And although, thanks to Senator Elizabeth Warren, there are some fierce pushes to protect Zelle users from outright scams and fraud, those proposed protections do not extend to voluntary transfers made to strangers by mistake. 

But what about our young college student Goldenberg?

Can our team rescue this consumer from his Zelle mistake?

About a month after I first heard from Goldenberg, he called me again.

“Please can you help me, Miss Michelle? You have connections at Chase I don’t have. I need your help,” he pleaded. “I still don’t have my money and the other guy, he told me now that he sent it back. But Chase says that isn’t true. I don’t know what to believe.”

Unfortunately, things hadn’t changed much since the last time I spoke to Goldenberg. The stranger, except for his name, was still nearly completely anonymous. It would be impossible for me to contact that person’s bank to see if the money had been returned. 

I made a deal with Goldenberg that if he could get one bit of identifying information from this other John Smith, I would attempt to track his money down. Since I knew that John Smith is familiar with my Zelle reports, I told Goldenberg he could share my message with the stranger. All I really needed to know was his bank. Nothing else. 

And within hours, Goldenberg had that critical piece of information. This John Smith is with Bank of America. Not only did he give that information to Goldenberg, but he did one better. He provided a letter from Bank of America that confirmed the $2,500 had been removed from his account weeks ago. 

This was all the information I needed.

If the money wasn’t in John’s account and it wasn’t in Goldenberg’s account, where did it go?

It was time to head back to my Chase executive contact to have another conversation. 

Good news: This college student got lucky this time

Hi *** & ***

I have a Zelle case here that isn’t typical… Chase customer Shlome Goldenberg sent $2,500 to a guy who had the same name as his friend **** ****, but it was a stranger.  The guy that he sent the money to reads my column so he was hesitant to send the money back (as he should be, of course).  Eventually, **** agreed to have his bank, Bank of America, remove the money from his account. It appears from the letter I received this morning, that Bank of America did so. However, the money didn’t return to Shlome. It seems that cash is in a black hole. 

Bank of America says the money was returned to the original account. Would your team be able to have a look and see if Shlome’s money has been redirected somewhere? He’s a college student and he’s very upset about the loss of his money. If we can track it down, that would be great!

Thank you! 😀

Best,

Michelle Couch-Friedman, Consumer Advocate

A few days later, Goldenberg’s battle for his cash was over. Chase contacted Bank of America; the $2,500 was tracked down and soon landed back in his account. 

Thank you so much!! I’m so grateful that Consumer Rescue exists. I don’t think I would have ever received my money if [John Smith] hadn’t sent me your articles. I’m also grateful that he agreed to help get the money back to me. I know he didn’t have to do that. I’ve learned such a valuable lesson. 
Thank you, Miss Michelle.  

Shlome Goldenberg

Now that Goldenberg has paid his friend back, thanked the other John Smith for his help, and deleted the Zelle app from his phone, he can breathe a sigh of relief – and this time legitimately. 

Here’s how to avoid making a costly Zelle mistake

  • Read the terms and conditions of Zelle: What I’ve noticed over the years is that many people have hooked up Zelle to their bank accounts without the foggiest clue about the app – or its dangers. If you don’t know much about Zelle, it’s imperative that you read all the terms, conditions and review all the cautionary tales on the Consumer Rescue site before proceeding. 
  • Always triple-check the Zelle address: All Zelle users are identified with their sending and receiving handle – typically a phone number or email address. It’s critical that address is an exact match to that of the person you’re sending cash to. It’s wise to triple-check that address field and make sure it matches on each screen. 
  • Does the picture match? Ask your intended target what their avatar (photo) is on Zelle. Even though many people share the same name on Zelle, it would be rare that they would share the same name AND same avatar. 
  • Contact the recipient BEFORE the Zelle transaction: It’s always a good idea to let your recipient know that you’re about to send money to them. I often call my target and stay on the phone until the transaction is complete – reviewing everything before the final confirmation.
  • First send a $1 test: If you’re intending to send a large amount of money to someone on Zelle, a great precautionary measure is to send $1 first. Check and make sure it was received before proceeding to send the rest. Remember to be just as attentive in your follow-up transfer.
  • Send a check instead: Keep in mind, checks still work fine in the United States. It’s very difficult to send money to the wrong person via a check. So the next time someone pressures you to install a money transfer app on your phone – one that you don’t know much about – offer to send a check instead. You can be guaranteed writing a check to a friend won’t lead to the type of instant cash disaster Petriv and Goldenberg encountered with Zelle. (Michelle Couch-Friedman, Consumer Rescue)
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Michelle Couch-Friedman

Michelle Couch-Friedman is the founder and CEO of Consumer Rescue. She is a consumer advocate, ombudsman columnist, mediator, writer, and licensed psychotherapist. Michelle is a public speaker, and her expert guidance has been cited in MarketWatch, Consumer Reports, Travel & Leisure, The Wall Street Journal, Newsweek, Popular Science, CNN, CNBC, Boston Globe, CBS News, National Geographic, Travel Weekly, Reader's Digest and more. You might even catch Michelle on TV reporting on a situation. :) Michelle is also the travel ombudsman columnist for The Points Guy and is the former executive director of the nonprofit Elliott Advocacy. During her six years in that position, she resolved thousands of cases for troubled travelers and other consumers. You can read hundreds of 5-star reviews Michelle earned during her service to the nonprofit since 2016 here on Great Nonprofits. She is also a member of the Society of American Travel Writers. Today, she continues to spend as much time as possible fiercely defending consumers and traveling the world with her family. Contact her at Michelle Couch-Friedman or on Linkedin, Twitter or Facebook.
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stephen_nyc

That is some excellent recovery work, Michelle.
All your points about how to minimize those errors are good. Might I be allowed to suggest another one? I have my own domain and every company and website (like yours) get an email address that represents that entity and when an email is sent, the email hosting company sends them all to my catch-all address. I pay extra for that service. Now, you don’t have to go that route, but maybe if folks created a different email address at one of those free sites and ensure it is not their_name [at] [that-domain] and then update their banking account so that if you were to ask them their email address for zelle, they’d give that newly created one, it would eliminate the same name problem. I would add that the name part should not start with their name otherwise much like url typing, if I type consumer in my browser, it is gonna finish it with the rest of your url.

Good news on your passport and passport card – belts and suspenders, I see.

Michelle Couch-Friedman

Thanks, Stephen. That’s a good idea that I’m sure would cut back on some of these mistakes. I’m certain though that even then a significant number of people would ignore the information in front of their eyes.

Yes, I’m all set to resume international traveling. :). Now we just need to see how long Amelie’s passport takes with regular processing! Michelle

joycexyz

I’d love to know where Chase was hiding Goldenberg’s money, and if they would ever have returned it to his account without your intervention.

Michelle Couch-Friedman

Joyce, we don’t know where the money was … it seems like it may have been in a holding pattern at Bank of America until Chase called asking for it.

Dan

I use zelle occasionally to pay babysitters and other service providers. I don’t enter names, phone numbers, or email addresses – I only pay incoming zelle requests. Any time I set up a new payee, I ask them to send me a request through zelle for whatever amount I owe. Since it’s just a request and not an actual cash transfer here’s no penalty for making a mistake at that stage. Once I receive the request in my app, I then send the money knowing with 100% confidence that it will be directed back to the requester and nowhere else.

I’ve never received an incorrect payment from an unknown person but if I did I would immediately assume it’s a scam. I would not respond to any calls, texts, or emails from an unknown sender.

DChamp56

OK, where WAS the money in question hiding??
That seems the more pressing issue here. Which bank was… hiding it?
Nice job as always Michelle!

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