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Zelle scam: Phony utility company caller drains Lorain woman's bank account

04-29-22 ZELLE SCAM.jpg
Posted at 5:49 PM, Apr 29, 2022

LORAIN, Ohio — On Thursday, Denise Traylor was in the middle of one shift of her 60 hour workweek when she received an automated phone call from what appeared to be her power company.

“Everything seemed pretty legit,” Traylor explained. “It was an automated voice message at first [saying], ‘This is the Illuminating Company. You have a disconnection notice. The guy will be out there in 30 minutes if you don’t take care of this today.’

The Lorain mother followed the message prompts until she was connected with a man identifying himself as a representative with the company. He knew Traylor’s address, balance and previous account statements. He assured her the fastest way to resolve the overdue bill would be to transfer funds through her Zelle app connected to her bank account.

“I’m so careful with my money. I’m so careful with it because I have a 3-year-old, I’m trying to do a lot, I’m starting a business,” she said. “I had no reason to think they weren’t the electric company.”

The man on the line walked Traylor through the transaction, first asking her to transfer $295.64. He then claimed it failed because only whole dollar amounts would be accepted and advised her to round up and resend $296. That didn’t work either, according to the supposed rep, and he gave her a security code to enter. She resubmitted the payment with the code, then a fourth time when she was told the letters in the code needed to be capitalized.

After four attempts, Traylor’s checking account was almost completely drained. When a fifth and sixth payment attempt were clearly denied on her end, she realized something was amiss.

“These people just scammed me. It just happened so fast that I couldn’t realize it until after it went down,” she said.

A call to her bank confirmed all of the payments had been processed, totaling close to $1,200.

“I don’t get paid until the 6th. I still have to pay my light bill, I still have to pay my gas bill. So I’m just screwed now,” she said.

Cybersecurity experts say Traylor is among those to fall victim to ever-evolving and increasingly sophisticated bank scams.

“You know the old saying, ‘Why do you rob banks? Because that’s where the money is.’ Well, now the money’s online,” said Alex Hamerstone, the Advisory Solutions director at Cleveland-based information security company TrustedSec.

Hamerstone explained scams, like the one that drained Traylor’s account, typically start with a phone call or text message appearing to come from your bank, utility company or other trusted institution. The phony message or rep will say you owe money or have been charged and need you to log into your account and enter a verification code. The code grants the imposter access to your account and authorizes the charge.

Once funds are transferred through apps like Zelle, they can be difficult to recover. The transactions are nearly instant and some banks may refuse to refund the lost money if the user was the one authorizing the transfer.

“Fraud is really if somebody else gets access to your account and makes payments or takes money. Then generally you have recourse and you can get your money back,” Hamerstone explained. “If they can get you to click transfer, then that's considered a scam and you have very limited recourse to get your money back.”

He said requests for official bill payments through the Zelle app should be the first red flag because most banks and companies will use their own payment platform. He also recommends using a 2-factor authentication and unique passwords to prevent an outsider from gaining access to your accounts.

This week, U.S. Senators from Massachusetts and New Jersey wrote a letter to Zelle’s parent company, Early Warning Services, LLC., calling for better consumer protection against scams and help getting customers’ lost money back. The lawmakers claim nearly 18 million Americans have been scammed through money transfer apps and said Zelle handled $490 billion in transactions in 2021, nearly double the amount of its nearest competitor Venmo.

Traylor plans to file a police report and said her bank is already investigating a claim she filed, but she was told it could take up to 10 days to recover the money she lost.

“I work so hard for something. For someone to just easily come and take it from me really, really, really pissed me off,” she said.

If you believe you’ve been the victim of a scam, you can report the incident through the Better Business Bureau by clicking here.

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