Zelle and Venmo Payment Scams
Americans lost $12.5 billion to fraud in 2024, according to the FTC.
Quick Answer
Peer-to-peer (P2P) payment scams on apps like Zelle and Venmo are a common form of fraud, with the FTC reporting that Zelle was used in 20% and Venmo in 9% of payment app fraud reports filed by consumers in 2023.
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How It Works
1
A scammer, posing as a buyer on a marketplace like Facebook Marketplace, contacts a seller and agrees to purchase an item using Zelle or Venmo.
2
The scammer sends a fake email that looks like an official communication from Zelle or Venmo. This email falsely claims the seller must upgrade to a "business account" to receive the payment, which requires an additional fee of a few hundred dollars.
3
To appear legitimate, the scammer claims they have sent enough money to cover both the item and the upgrade fee. They provide fake screenshots as proof and pressure the seller to immediately "refund" the upgrade fee.
4
The seller sends the refund amount from their own funds. The original payment from the scammer never existed, and the money the seller sent is instantly lost and nearly impossible to recover.
Red Flags
- The buyer insists on using Zelle or Venmo but refuses to meet in person for a local transaction.
- You receive an email claiming you need to pay a fee or upgrade to a "business account" to receive money.
- The buyer claims to have overpaid you and asks you to refund the difference.
- The buyer pressures you to act urgently and ship an item before verifying the payment has cleared in your account.
- Emails supposedly from Zelle or Venmo have spelling errors or do not come from an official domain like @zellepay.com or @venmo.com.
- The buyer sends a screenshot of a payment confirmation instead of you seeing the funds deposited directly in your app or bank account.
What to Do If Targeted
- Only use P2P payment apps like Zelle and Venmo with people you know and trust, such as friends and family.
- Never send money to someone to "upgrade" your account or to refund an overpayment. Legitimate companies do not operate this way.
- Always verify payments by logging into your bank account or the payment app directly. Do not trust emails or screenshots sent by the buyer.
- If you receive money from a stranger by "accident," do not send it back. Contact the payment app's customer service to have them reverse the transaction.
- If you are scammed, contact your bank or credit union immediately to report the fraud and ask to have the transaction reversed.
- Change your passwords for your payment app and bank account if you believe your account information has been compromised.
How to Report It
- FTC — File a fraud report with the Federal Trade Commission to help law enforcement track and stop scammers.
- FBI IC3 — Report internet-enabled crime, including payment app scams, to the FBI's Internet Crime Complaint Center.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- In 2023, Zelle was named in 20% of consumer fraud reports involving payment apps, while Venmo was named in 9% of reports. — FTC 2024
- The median individual loss for fraud originating on a payment app or service was $380 in 2023. — FTC 2024
- Four major banks reported over 192,000 cases of Zelle-related scams involving more than $213.8 million in losses during 2021 and the first half of 2022. — U.S. Senate Report 2022
- Authorized Push Payment (APP) fraud, where victims are tricked into sending money, is the most common type of fraud by case volume, affecting 22% of financial institutions. — Alloy 2024 State of Fraud Benchmark Report
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Frequently Asked Questions
It is very difficult to get your money back. These apps are designed for instant money transfers, similar to using cash. Once you authorize a payment, the funds are gone, and banks and the app companies are often not required to reimburse you for scams where you willingly sent the money.
No, Zelle and Venmo are legitimate peer-to-peer payment services. However, their speed and the irreversibility of transactions make them attractive tools for scammers to exploit. The scams are run by fraudulent users, not by the companies themselves.
Scammers on marketplaces like Facebook claim you need to upgrade to a Zelle business account for a fee to accept their payment. They send a fake email from Zelle about this and pretend to send extra money to cover the fee, which they ask you to refund. No payment was ever sent, and any money you "refund" is your own money being stolen.
For online sales with strangers, avoid using Zelle or Venmo as they lack buyer and seller protections. For local sales, insist on cash in person in a safe, public location. If you must use a payment app, only use it with people you personally know and trust.
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