Peer-to-Peer Pros And Cons

DECU’s partnership with Zelle is revolutionary and convenient. The peer-to-peer (P2P) payment service lets DECU members electronically transfer money between private bank accounts using DECU’s Mobile App or DECU’s online website. But P2P scams are happening, and some Zelle users are losing money. In this blog, we help you put safety protections around your Zelle account and keep you safe from P2P scams.

Peer-to-Peer Networks

Zelle is an excellent service that works in direct partnership with DECU’s Digital Banking platform. It is a fee-free service for DECU members, making it extremely easy to settle small cash payments between acquaintances and family members.

Unlike some P2P payment services, Zelle’s lack of a transaction fee is what makes paying back your brother $35 for football tickets, your mom $70 for the holiday rental, and your neighbor $10 for mowing the fence line so simple and cheap. 

woman transferring money

Open the app, select the amount, enter the recipient’s details and push the button. Within a very short time, the money processes, and your transaction is settled.

Still, in bold print and for everyone to read, P2P payment services tell their users that the app should only be used for non-commercial cash transactions with people you know. There is no direct mechanism for a refund because why would you ask your mom to return the holiday rental payment? 

Well, that’s a problem, you see, because in a world of internet strangers, the lack of a direct refund button means there is a sliver of wiggle room for scammers within the rules.

P2P networks abound, whether it’s Zelle, Venmo, CashApp, Google Pay, or PayPal, the same basic rules apply:

  • Send money only to people you know
  • Don’t use P2P services for business purposes
  • Confirm that you can find help if things go wrong
  • Keep your app up to date

Peer-to-Peer Scams

You and your kids and everyone you know all want a dog, and this stranger on the internet is selling puppies. The pictures are insanely cute, and this stranger on the internet says if you send a P2P payment, they will reserve the puppy your kids have already started calling ‘Mr. Pickles’.

man looking at phone

It’s a scam. You pay them over a P2P network and see the money disappear, and Mr. Pickles never comes to live at his new forever home. There is no way to get the money back. The internet stranger disappears, and your kids are out of their minds with grief. 

Another example includes an online posting for a spacious apartment for rent in your price range, so you email the listing contact.  You get a quick response that the place has strong interest from several candidates and will likely be rented by tomorrow. 

But, the email says, if you send a cash deposit via P2P, then this stranger on the internet will hold the apartment for you alone.

It’s a scam. Your emails to the internet stranger disappear into a giant black hole. There’s no mechanism for a refund, and you never get to live in the highly “wanted” and affordable apartment. 

You get an official-looking email from an official-looking customer service agent who claims that you are already a victim of fraud at your Craigslist, Amazon, eBay, or iTunes account. If you verify your online bank login and password by email or phone, this will all be settled. 

You do, then you get a phone call from a telephone number that matches the one on the back of your credit card. Seems legit. You hand over one-time access codes to the P2P network, and the internet strangers set up Zelle payments inside your bank account, draining your funds for as much money as they can. 

Scam, scam, scam. Internet strangers will never run out of victims because there is no end to the number of new scams out there. And peer-to-peer payment networks are just another in a long line of common scams that prey on our natural human ability to trust our surroundings.

woman on phone

Peer-to-Peer Solutions

Zelle themselves recognized the potential for fraud and abuse of their product and have instituted a claims report function on their website for seven types of online fraud.

Merchandise:  Individual or business offering to provide goods or services but providing nothing once payment is sent.  Examples include, but are not limited to, event tickets, pets, clothing/accessories, devices, home services, including repair, yard, or cleaning services.

Property:  Sending money to an individual or business for a deposit on a property for sale or rent that they do not have the right to sell or rent.

Jobs:  Sending money to an individual or business for job counseling services or the promise of a job that requires fees for supplies, equipment, or services.

Imposter:  An individual pretending to be a well-known business, family/friend, or government agency requesting money.

Charity:  Spoofing existing charities or pretending to be a non-profit requesting donations for fundraisers, community events, natural disasters, or national crises.

Investment:  Ponzi or get-rich-quick schemes.  Individuals or businesses are promising high returns in a short period to persuade you to send money for a false investment.

Romance:  Requesting money under the guise of a romantic relationship.

However, Zelle distinguishes users who transfer money on the downloaded Zelle App and users who use the Zelle function within DECU’s own mobile banking app. 

DECU users who find themselves victims of online fraud should contact DECU’s customer support team at 1-800-338-6739. Users of the stand-alone Zelle App can contact Zelle’s customer support team at 1-844-428-8542.

Still, Zelle’s end-user liability agreement is clear about what constitutes an authorized purchase on their platform and what counts as unauthorized. 

If you use Zelle to buy a guitar from a stranger and the guitar never shows up, there’s very little left for you to do but strum the air and sing the blues.

happy man on phone

DECU Fraud Department

Deere Employees Credit Union has seen fraud scams on the rise and has mechanisms to help members avoid scams on Zelle and online fraud in general. 

But DECU’s own specialists all say the same thing: the primary source of P2P fraud among Zelle users is a misunderstanding, misuse, and the mistaken belief that Zelle payments have the same consumer protection assurances as a DECU Visa credit or debit card.

For your benefit, we include DECU’s very own recommendations for using Zelle or any P2P payment service this holiday season.

  • Do not grant a stranger access to your DECU online banking
  • Never send money via Zelle or gift card purchases to correct an “error” on any account
  • Do not grant a stranger remote access to your phone or computer

Likewise, DECU’s Fraud Department says if you receive a notification that one of your online accounts has been hacked or compromised, close the alert, or hang up the phone, log into the account to find a reliable customer service line, and contact the company directly. 

As a matter of principle, no reputable company will object to you disconnecting and calling them back. DO NOT simply google “amazon customer service” and call the first number you see. Visit the merchant’s actual website and call them at the number provided. 

Also, pay close attention to texts containing access codes.  If the message states to provide an access code over the phone, please know this is information DECU will never ask you for – we will never ask for an access code over the phone.