How to Avoid Scams on Zelle, Venmo, PayPal and Other P2P Apps

In December 2024, the Consumer Financial Protection Bureau (CFPB) sued Zelle’s bank-owned network operator, Early Warning Services, along with three of Zelle’s founding banks: JPMorgan Chase, Bank of America and Wells Fargo.

Although CFPB voluntarily dismissed its case in March 2025, it alleged in its initial complaint that consumers have lost more than $870 million to fraud and scams on Zelle since the service began operating in 2017.

Zelle's response

Zelle spokesperson Eric Blankenbaker places the blame not on P2P payment services, but on the scammers who exploit them. “The [Federal Trade Commission] and law enforcement agencies consistently identify social media platforms, online marketplaces, spoofed phone calls, text messages and dating apps as primary channels scammers use to target consumers,” he says. “Criminals — often operating from overseas –– manipulate consumers through those channels and then attempt to persuade them to send money using a variety of payment methods. Zelle is one of the many ways consumers could send money to scammers, but Zelle is not the problem, criminals are.”

Currently,  only 0.02 percent of Zelle transactions involve unverified claims of fraud or scams, Blankenbaker says. “Just because a claim is reported doesn’t mean it’s an actual scam or fraud,” he continues. “Some claims are later found not to be fraud, such as forgotten purchases, criminals that have filed false claims, a dispute with a contractor who doesn’t complete agreed-upon work or transactions authorized by another family member with access to the bank account.”

​Top scams using P2P payment services ​​

• Impersonation scams: Criminals often persuade victims to send money by pretending to be someone they’re not — for example, your grandson asking for money to pay an uninsured motorist with whom they just got into a car accident, a federal agent collecting outstanding taxes or a bank employee asking for a deposit to keep your account active. Thanks to artificial intelligence (AI) — with which scammers can clone real voices and faces — impostor scams are becoming even more common and more difficult to detect.​​
• Fake seller scams: Criminals on Facebook Marketplace or another online platform advertise a fake product or service, collect your money upfront, then disappear without delivering the goods.​​
• Advance-fee scams: Do you remember the “Nigerian prince” scams of the 1990s? Someone claiming to be royalty emails purporting to have temporarily lost access to their wealth. They’re in trouble and need your help. In exchange for assistance, they promise a hefty reward once they retrieve their fortune. That’s an advance-fee scam. Lottery scams — someone claims you’ve won the lottery and offers to send your winnings in exchange for a service fee — are another example.​​
• Phishing scams: Phishers want you to click a link that lets them install malware on your device or otherwise record your Zelle, Venmo or another payment service credentials, which they can use to access your bank account. A common scenario, especially during the holidays, is delivery-related scams, often in the form of a “missing package” text that claims you have a lost package you can retrieve by clicking a link.​​​
• Job scams: Scammers lure you with a job that promises to pay a large sum for a small amount of work — for example, rating products online. To get the job, they ask you to pay upfront for training, supplies or equipment, utilizing Zelle or another P2P payment service. Fraudulent employers might also issue a fake check for you to deposit into your bank account for the purpose of paying fake vendors via Zelle; by the time the fake check bounces, you’ve already paid the funds with your own money. In yet another version, the employer sends a fraudulent paycheck for more than the required amount and asks you to refund the difference via Zelle.

Reimbursing victims​​​​​​

In July 2024, the Senate Permanent Subcommittee on Investigations published a report examining records from three of Zelle’s founding banks: JPMorgan Chase, Bank of America and Wells Fargo. It found that in 2023, banks reimbursed victims of unauthorized fraud only 38 percent of the time. Between 2021 and 2023, it said, they failed to reimburse more than $100 million per year in disputed fraud.

A lot has changed since then, according to Blankenbaker, who says Zelle has implemented “significant changes, investments and protections.” “Zelle goes beyond legal requirements for reimbursement,” he notes. “Participating financial institutions are required to reimburse consumers for confirmed fraud, and Zelle also requires reimbursement for certain qualifying impostor scams where the consumer authorized the payment.”

Although it’s not clear which imposter scams qualify for reimbursement, the distinction between “authorized” and “unauthorized” payments is important: Unauthorized transactions (where the consumer had no involvement in the fraudulent transaction, such as when a criminal gains access to your account) are typically reimbursed. Authorized transactions (where an account holder initiates the transaction, even if the money ends up in the hands of a scammer) are usually not reimbursable. ​​​​In all cases, Zelle says you should contact your financial institution to inquire about their specific reimbursement policies.​

Venmo also offers advice on scams on its site and says to report them to the Venmo support team. It warns that there’s no way to cancel or reverse a payment once it’s sent. PayPal’s site includes similar advice.​

Stopping scammers

Even if you can’t recover it, it’s important to note that P2P payment services are working hard to make it more difficult for scammers to steal your money in the first place, says Justin Fernandez, founder of ScamDrill.com, which offers safe phishing simulations that help consumers learn how to recognize scams. Within the last year, he notes, both Zelle and Venmo have introduced in-app features that create “friction” for scammers. Zelle, for example, has introduced first-time-recipient warnings that ask you to verify transactions before sending money to new recipients. Venmo has a similar feature and provides explicit scam warnings when you’re sending money to someone outside your contact list.

“Friction works because it doesn’t try to teach anything. It just inserts a pause that helps reset your frame of mind,” Fernandez says. “These delays are having an impact. The reason they work is timing. The warning shows up at the exact moment the victim’s gut has taken over, and it doesn’t require them to recall anything from an article they read six months ago. It forces a brief move from reflexive thinking back into deliberate thinking, which is exactly the point.”

Behind the scenes, some banks are also using behavioral signals to pre-empt suspicious Zelle transactions on their mobile banking apps, according to Barshishat. “A lot of banks are stepping in and building controls around stopping scams, even though they may not reimburse,” he says.

By analyzing your previous transactions, for example, banks can detect unusual transaction times, locations and amounts. In some cases, they might even be able to detect other triggering behaviors, like fast typing speeds — a sign of urgency or stress — or the fact that you downloaded a cryptocurrency app prior to initiating a Zelle payment. If something seems off, they might send you an alert, put the transaction on hold, or decline it altogether.

“Zelle and participating financial institutions use billions of signals, real-time warnings and predictive fraud detection technology that allow us to identify patterns, pinpoint criminals and block scammers from using Zelle,” Blankenbaker says.

How to protect yourself from P2P scams​​

• Only use Zelle, Venmo and other P2P payment services with trusted parties: Grobman says they are best used with people you know and trust — friends and family members, for example, or local businesses with brick-and-mortar locations and flesh-and-blood employees. If you’re transacting with someone new or unseen, it’s best to use a credit card. Or better yet, a virtual credit card from your card issuer, which uses a disposable number that’s different from the number on your physical card. If a business accepts payments only through a P2P payment method, that’s a red flag.​
• Be suspicious of out-of-the-blue requests: Whether it’s a knock on your door, an email, a text message or a chat request on social media, beware of unsolicited requests, says Michael Steinbach, former managing director of financial crimes and fraud prevention at Citi, whose mantra is, “Don’t take it; make it.” If you get an unsolicited call from your bank, for example, don’t take the call. Instead, look up the bank’s phone number online and make an outbound call to ask if it was legitimate. Be especially wary of urgent messages, Zirkle says; legitimate businesses don’t ask customers to send information or money “right now.”​
• Treat digital payments like cash: If you’d hesitate to mail a $100 bill to a stranger, you shouldn’t send them $100 through Zelle or Venmo, either.​​​

What to do if you’re the victim of a P2P-based scam​​

• Lock down your financial profile: Take the same steps you’d take if you’d lost your credit card, suggests Steinbach. That includes setting up alerts with your bank, which can notify you every time there’s a new transaction on your account; contacting your bank to change your online banking username and password; and asking the three major credit bureaus to freeze your credit.​
• File a police report: Although law enforcement probably won’t investigate, filing a police report creates a record of the event that can be helpful later in case of additional fraud or identity theft, Zirkle says.​
• Notify the feds: The Federal Trade Commission (FTC) has a website — ReportFraud.ftc.gov — where you can report fraud. ​​
• Alert your bank: Early Warning Services shut down the standalone Zelle app in 2025. If you’re using Zelle, therefore, you’re probably using it through an online banking app, in which case you should contact your bank or credit union at the customer support number on the back of your debit card.
• Contact the app. For P2P payment services with their own apps, like Venmo, go directly to the app’s website to contact customer service. If you do a generic web search for a company’s customer service department, fake sites built by crooks often will show up among the results — and you could get hit by a whole other scam, the AARP Fraud Watch Network notes. 
• Beware ‘fund recovery’ services: Re-victimization is becoming a major trend, according to Fernandez, who says people who lose money on Zelle often are re-targeted hours, days or weeks later by “fund recovery” outfits. Typically, the scammer reaches out on messaging apps like Telegram or WhatsApp, claiming to be a blockchain forensics specialist, a “cyber recovery” firm, or a fraud investigator from either the FBI or the victim’s bank. In exchange for a fee — paid via cryptocurrency or the same P2P payment service that the victim previously used — they offer to recoup the funds but never do, Fernandez says.
• Find support. Contact the toll-free AARP Fraud Watch Network Helpline at 877-908-3360 for advice, support and resources (available Monday through Friday, 8 a.m. to 8 p.m. ET).