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INDIANAPOLIS, Ind – The Better Business Bureau and several major banks are warning people against the “pay yourself” scam, which aims to use the payment app “Zelle” to steal from unsuspecting victims.

“It’s kind of a combination of a phishing attempt as well as posing as a bank,” said Better Business Bureau spokesperson Jennifer Adamany.

“All they’re trying to do is to take over your home banking account so that they can then use Zelle to send money to themselves,” said Forum Credit Union C.O.O. Andy Mattingly.

The scam works by tricking bank customers into thinking fraud has been detected on their accounts.  A text message that looks like it’s from your bank says there has been suspicious activity on your account, possibly a suspicious purchase, and the only way to stop it is for you to send yourself a payment using Zelle.  Once you respond to the scammer, they begin the process of tricking you into doing what they want.

“A lot of people don’t even know that they have Zelle connected with their account, that’s what gets a lot of people confused,” Mattingly said.

A confused customer may realize for the first time that they have Zelle attached to their account and attempt to use it in an attempt to send the payment to themself.  When you enroll in Zelle the first time, your bank will send you a one-time code to verify your identity and attach the Zelle service to your account.  The scammer will say they need that one-time code in order to authorize your payment to yourself.

“In reality, what’s going on is they’re using that code to set up their bank account,” Adamany said.  “So, when you make that payment, you’re sending it to them instead of yourself.”

While many customers may be unlikely to believe sending a payment to their own account can stop fraudulent activity, the scammer isn’t counting on a rational reaction to the fake fraud report.  They’re banking on you getting flustered and reacting impulsively.

“They’re always just trying to create this sense of urgency and the fact that you’re going to lose something, and you have no time to stop it if you don’t do it now,” Mattingly said.  “So, scarcity of time is what they play on.”

The scam can seem convincing because so many bank customers receive fraud alerts via text message, and many are unfamiliar with how Zelle works.

“The caller ID may even look like it’s your financial institution, so you can’t even trust that anymore,” Mattingly said. 

If you receive the scam text, you can avoid being tricked by not replying to it, and not calling the number provided in the text.  Call your bank directly to ask about any fraudulent activity on your account.

“Use the number that’s on the back of your bank card or debit card or credit card and contact them through that means because you’ll know that is the actual number to get ahold of them,” Adamany said.

Zelle recently posted an online video about the “pay yourself” scam and how to avoid it.  You can watch the video here.