How can i get my money back from zelle

The FTC says in the first half of this year mobile app scams have cost consumers nearly $60 million in losses.

"I was sick to my stomach," said Barbara Zyhajlo, a scam victim.

Her checking account got drained by the same clever coast-to-coast con: Imposters posing as bankers and tricking customers like single mom Zyhajlo into using Zelle.

"He was just so professional and made it seem like it was Bank of America calling," Zyhajlo said.

The call came after she got a text stating it was her bank, Bank of America, asking to confirm a transfer she didn't make.

After getting convinced there was fraud on the account, Zyhajlo was told to use Zelle to send money to a new account in her name.

She said she had never used Zelle before.

Neither did a school nurse in Chicago, or a teacher in San Francisco, they also got scammed into sending money via Zelle as well.

"Sure enough I looked in my account, sure enough, $3,500 was gone," a victim said.

Zelle's network operator, Early Warning Services, told 7 On Your Side, "This is a phishing scam where the scammer spoofed the bank phone number and attempted to convince the individual to provide their personal information, not a breach of the bank's or Zelle security."

Bank of America told customers they are responsible for any funds transferred via Zelle which is used by hundreds of banks.

But after the victims called 7 On Your Side, Bank of America refunded their money.

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Zyhajlo, a Red Cross frontline worker, called was smart enough to file a police report in South Amboy outlining the fraud, which was clutch.

"I was ecstatic to get it back, I was so happy," Zyhajlo said.

Financial institutions remind customers they will never ask customers to transfer money via a cold call, text or email. If you get contacted to do so, call your bank directly, never trust anyone calling from the number that reached out to you.

The big takeaway, if you've been a victim of any kind of bank fraud, report it immediately. Most banks give just 60 days to file a claim.

But the most important step is to always get a police report. Submit it to your bank as part of your investigation. Banks won't take you seriously unless you have that.

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So are you entitled to a refund if it happens to you? 7 On Your Side's Michael Finney has a surprising but hopeful answer.

Quick-pay apps like Zelle don't offer any of the fraud protections you get with credit cards. The Zelle user agreement says if you send someone money and it turns out to be a scammer, too bad. There are no refunds. However, with this latest scam, a little-known federal law says you should get your money back.

Reports of the scam are spreading fast. Imposters claiming to be from Bank of America call random victims, saying someone is trying to hack their accounts.

"The Bank of America identification came up on my phone," said David Barnett of San Francisco.

"I thought, 'Oh my gosh I didn't authorize a $3,500 transfer through Zelle," said Page Pollack, also of San Francisco.

"And within 15 seconds, my phone rang," said Donna Stoker of Cartersville, Georgia. "He said, 'Whoop, they just tried to get $3,500.'"

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"So I fell for it right away; I got freaked out," said Claudia Rivera of San Jose.

The imposters urge them to quickly transfer their money through Zelle "before hackers can get it."

"First, what I need you to do is open the Bank of America app, go to the Zelle," Stoker said, repeating the scammer's instructions.

"You're going to go to Zelle and send it to yourself," Crystal Vaka of Antioch said she was told.

"He took me through the steps of transferring a large sum of money from my Bank of America account," said Barnett.

The imposters claim the money will go back to the customer. Actually, it's going right to the scammers.

"I looked at my account and $3,500 was gone," said Pollack.

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"Here I was being told I was defrauded by a man who was defrauding me," said Barnett.

In each case, Bank of America denied their claims for a refund, saying the victims were the ones who authorized the transactions.

The Zelle user agreement on the Bank of America website says: "neither we nor Zelle offer protection for authorized payments... for example, if you do not receive the goods you paid for..."

And even though it was a scam, the victims 'did' authorize a payment for goods they didn't get - namely, their own money back!

"It was a real eye-opener... I trusted my bank to have top-of-the-line security," said Vaka.

"So you're gonna tell me you're not going to insure this money? And they said, 'No because you used it through Zelle,'" said Stoker.

"Sorry you're out of luck, lady," Pollack recalled being told.

RELATED: Scam targeting Bank of America, Zelle users steals thousands through mobile app payment

"I'm sorry ma'am, there's nothing we can do," Vaka echoed.

However, cyber security expert and journalist Bob Sullivan says federal law does protect victims of this type of scam. "It's always the advice that, sorry, there's nothing we can do."

"Those kinds of fraudulent transactions are covered by Regulation E, and consumers should be getting refunds," Sullivan said.

Regulation E, part of the federal Electronic Fund Transfer Act, requires banks to refund consumers for fraudulent transactions on their accounts.

The Consumer Financial Protection Bureau put out a directive in June, saying the law applies "if a third party fraudulently induces a consumer into sharing account access information."

"This is when someone tricks you. So the whole idea that treachery is involved should mean consumers are protected by Regulation E," said Sullivan.

We told Bank of America about all the victims - pointing out consumers were tricked into transferring their funds.

And right away the bank replaced their money but did not cite a reason, saying it considers each case individually.

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Bank of America did say it complies with Regulation E.

Sullivan warns, however, the law does not protect consumers when they use Zelle to make a purchase or payment -- even if they get scammed.

For example, if you use Zelle to buy concert tickets, and never receive them, you are out of luck.

Sullivan and other consumer advocates say banks should be using fraud filters on Zelle transactions to stop scams -- as they do with credit cards.

But that could slow the quick payments that customers want.

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"Any speed bump in the process is going to annoy customers, that's true. It's even more annoying when consumers find $2,000 is missing," said Sullivan.

Consumer advocates say scammers are exploiting Zelle because the app is connected automatically to millions of bank accounts. When victims open their mobile banking app, Zelle is right there, connected to their money. Bottom line, don't answer a text or call even if it seems to be your bank. Hang up and call the bank directly.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

Have a question for Michael and the 7 On Your Side team? Fill out the form HERE!

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