CLEVELAND — If you haven’t heard already, there’s a new scam that doesn’t require a ton of work by fraudsters. In some cases, the only thing they need is a victim’s phone number.
Using Zelle – an instant person-to-person payment system being used by banks to simplify money transfers – scammers are sending money to themselves, draining your account in the process.
Kierra Cotton lost $1,988 after falling for the scam.
“I got a call from the Fifth Third customer service phone number,” Cotton recalled. “A man named Kevin answered said, ‘hey we’re recognizing some foreign charges on your account coming out of Miami, Florida.’”
Little did she know, “Kevin” used a process called spoofing to make the call appear as if it came from Fifth Third. In reality, Kevin was a well-trained Fraudster.
Cotton says she let her guard down based on the Caller ID, and because Kevin knew some of her basic personal info and even her banking password.
“He went on to explain how he was making sure that these charges didn’t go through and he was taking care of me.”
During the process, Kevin had text messages sent to Cotton’s phone with verification codes. He told her the codes were used to verify her identity and help expedite the fraud prevention process. But that’s not the case.
The verification codes were used to setup a Zelle account through Fifth Third Bank and approve transactions that sent money off to fake bank accounts used by the bad guys. In total, they were able to approve two transactions, one for $1,000 and another for $988.
Cotton noted that the text messages do explain a Fifth Third employee would never ask for the codes, although in the past, she has been required during real interactions with Fifth Third to provide the codes.
“In other cases, like [when] I setup my apple wallet, that same process happens,” Cotton explained. “I call to setup my Apple Wallet. They send me a text message. I have to read them the code to get that authorized.”
In that case, she initiated the call to the bank, but the text messages have the same warning not to share the codes – just like the Zelle authorization codes.
“I’ve never used Zelle a day in my life,” said Cotton. But the next day when she checked her email, she found confirmation of Zelle being setup along with confirmations of each transaction and who they were sent to. The scammers even transferred money from her savings account to maximize their haul.
And Cotton isn’t the only person to be victimized in this fashion. Damon Lander, also with Fifth Third Bank, described a very similar scenario.
Zelle is used by dozens of major banks and was deployed to combat consumers who choose to use Cash App, Venmo, and Paypal to complete person-to-person transfers. But these scams prove it too is vulnerable.
The Better Business Bureau provided the following recommendations to help reduce the chance of you becoming a victim:
- Don't panic. If someone calls, emails, or texts you claiming to be from your bank...do not respond or provide any information. Instead, contact your bank directly using the number on your bank statement or on the bank's website and ask if they tried to contact you about your account.
- Never provide passwords, account numbers, allow access to your account based on a phone call, text, or email. Your bank will not contact you to ask for this information.
- Scammers use call spoofing to appear to be calling from your bank. Your caller ID is not always proof of the caller's location so don't rely on it.
- Debit cards do not offer the same protection that a credit card offers. Never give anyone your debit card number/PIN or give them access to any accounts that are tied to a debit card.
Cotton admits there were some red flags that were more visible in hindsight.
“A couple different times, the call kept dropping, and that’s also when it clicked that something isn’t right,” she said. “That’s when I called Fifth Third myself… and they said they had no record of me talking to anyone from their bank.”
But scammers are professionals, too. They know how to make you feel vulnerable and are very convincing.
“I definitely think people would easily fall for this,” said Cotton, warning others to always keep your guard up.
“I consider myself a pretty educated person. And it was so believable.”
***Disclosure: Kierra Cotton, the fraud victim in this story, is an employee of 3News.***