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Digital Payment Apps Such As Zelle Are Convenient Ways To Send Money, but Do They Come at A Cost?

The payment landscape is rapidly changing, driven by digital technology innovation and consumer demand for on-demand banking and payment solutions. 

With multiple digital channels available to customers, virtual interactions are increasing, while contactless payments provide fraudsters with additional avenues to explore. Scams in which criminals trick bank customers into withdrawing funds from their accounts increased by 45 percent in the second half of last year. With the customer’s permission, £135 million was transferred out of personal accounts to fraudsters in the six months to December. The total for the first half of 2021 was £93 million. Over the course of the year, over 84,000 bank customers were victimized, with some losing tens of thousands of pounds.

According to banks, scammers are shifting their focus from attempting to penetrate banking systems to directly defrauding members of the public. Businesses are also being targeted, with a similar sharp increase to £74m in suspicious transfers unwittingly authorized by employees. The scams range from dubious or non-existent goods being sold online to sophisticated scams in which the perpetrator poses as a known trader and demands payment.

In some of the most heinous cases, criminals hack into the email accounts of solicitors handling house sales or builders genuinely working on a house, then send invoices requesting money be transferred to a fraudulent account.

Victims of Deception

moneytransfer scam

Payment interception, also known as “man in the middle fraud,” occurs when malicious individuals gain control of a payment process. Credit card fraud is shifting to e-wallets and social media-based transactions. 

With payments now being accepted via Facebook Messenger, fraudsters are seizing control of transactions by intercepting them in the middle of the sales process. Some pretend to be a company representative and direct hot leads to another bogus website. For example, a fraudster may skim through the comment sections of an online store’s website and respond to inquiring customers with a link to an unauthorized payment page.

Katy Worobec, an economic crime specialist at UK Finance, believes the most heinous examples are when fraudsters call, email, or show up in person, claiming to be from the police or the customer’s bank.

“We are seeing a shift away from some of the methods that fraudsters are using to try and attack banks’ security systems and toward focusing on the individual and dumping them into making the payment themselves,” she says.

The increase in documented cases is due in part to more banks detecting and reporting the scams, but UK Finance is concerned about the trend. The issue is that in most cases, the customer is held responsible for authorizing the payments and thus ends up footing the bill. Banks reimbursed £83 million in losses in 2018, but the total bill to individuals and businesses was £354 million.

They have promised to implement a new voluntary code beginning on May 28 of this year, under which victims will be reimbursed if they meet expected standards of behavior. However, banks can still avoid paying if they can demonstrate the customer’s gross negligence.

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The Case of Elling - Payment Scam

Everyone has a hobby, and Addie Elling’s is painting. “I work 40 hours a week, then come home and paint,” Elling explains. It’s a hobby that also allows her to pay her bills. 

“I received a $1,000 commission on one of my most recent paintings, which was one of my higher commissions,” Elling says. But the money was stolen before she could spend it. “It vanished in an instant,” Elling says. It all started with a text message from someone claiming to be from Elling’s bank, Wells Fargo.

“It said, ‘Did you authorize a $3,500 purchase through Zelle?'” “Then it said ‘Y’ for Yes or ‘N’ for No,” Elling explains. She pressed the ‘N’ key and immediately received a phone call. The person on the other end sounded professional and said everything Elling needed to hear, telling her that her account had been hacked and that she needed to send herself three payments through Zelle to get her money back. “Basically, they started the whole thing by trying to help me avoid being scammed, but they were actually scamming me,” Elling explains.

Elling claimed that $1,800 was stolen from her bank account. She is not alone. What happened to Elling is happening to tens of thousands of other people across the country. Zelle was founded in 2017 as a collaboration between several banks, including Wells Fargo, US Bank, Bank of America, and others. According to Zelle, over $490 billion will be transferred via the app in 2021. Digital payments, such as Zelle, have quickly become a popular way for consumers to send money to friends, family, and businesses with little to no fees, but does this convenience come at a cost?

If you have been scammed through online, then contact us to get your money back!

money bank shopping calculator

Funds Trace To The Rescue

Elling had no choice but to look into Funds Trace, and everything she came across screamed authenticity and dependability. She decided to call and explain her situation because she didn’t want to be taken advantage of again. 

With their customer service, they were very professional and solution-oriented, and they took the time to walk her through the entire process. Elling decided to give them a try after speaking with previous clients and reading various success stories. It ended up being the best decision she’d ever made. 

They understood that internet fraud is a time-sensitive issue, and that the sooner they started looking into it, the sooner her money would be recovered. Statistics show that if the fraud is reported within two days of the incident, the scammer is apprehended 87 percent of the time. Elling, on the other hand, was not one of the lucky ones, but Funds Trace assured her that her money would be reimbursed.

Following the case review, a member of their team contacted her to discuss your position further and offer advice tailored to her specific situation. Evidence was crucial in swaying the case in her favor, just as it was in any other criminal case, so they began gathering evidence and evaluating brokers immediately. Elling’s steps were followed by members of their squad who returned to the Judge to collect any and all relevant proof materials. The investigation included calls, messages, emails, screenshots, billings, bills, and the entire digital footprint. Elling is currently working with digital experts to recover all relevant evidence in order to build the strongest case possible. 

They kept her updated throughout the process, giving her peace of mind that Funds Trace was hard at work on her case. The team members began working on the paperwork for her case. To avoid rejection by the financial institutions involved, the data was structured in an efficient, effective, and viable manner.  

This is the final step in the recovery process. At this point, their recovery specialists devised a one-of-a-kind strategy for completing the recovery; they considered personally approaching the local police, delivering the proof, or enlisting the help of a third party. They went with the first option and contacted the owners of fraudulent websites. At first, they pretended to be surprised that anyone would question this, but after being approached by a group of specialists who threatened legal action, they caved and handed over half the money. This did not prevent Funds Trace experts from devising a backup strategy that included contacting financial institutions.

They’ve partnered with payment processors such as Transferwise, Paypal, and others to help us recover your funds. Finally, they contacted banking institutions, which agreed to assist because of the undeniable evidence provided by Funds Trace, and they issued an official notice to the bogus organization.


Uncovering the Truth Using Technology & Experts

Customers are usually discouraged from taking strict action against scammers or pursuing cases on their own due to a lack of power in the matter. An ordinary person may lack confidence in dealing with the situation because they lack the perspective of an outsider. And they may have difficulty establishing their authority when speaking with officials at times.

In this case, however, Funds Trace flipped the script. They spoke with the victims’ attorneys on their behalf and advised the victims to follow the legal process so that the police would take the matter seriously. As previously stated, Funds Trace understands human psychology and uses language and inflections to persuade scammers to agree to their demands.

Elling hired the right fund recovery company, and the relevant teams examined the case and gave her an accurate assessment of the situation. Victims may fail to recognise that in the majority of scams, optimal fund recovery is possible. While efforts may be difficult in cases such as bitcoin scams. However, when asset recoupment is possible, investigators put their best foot forward in gathering evidence to prove the criminals’ fault. They assisted her in gathering receipts, registering all chats with the scammer, tracking how the scam was carried out, and preparing documents to be submitted to local police in exchange for full cooperation. 

The entire procedure took five months. The scammers stole money from and transferred it to other accounts using social engineering. Funds Trace became involved after the funds were transferred and initiated legal action. The company obtained a court order freezing the thieves’ accounts and bank accounts, as well as obtaining all relevant information about them. The recovery firm then contacted the banks and went to court to force them to return the stolen funds. The government of the thieves’ home country also became involved.

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Key Takeaways!

So, if you use digital payment apps, Funds Trace recommends the following precautions:

  • Don’t believe caller ID, text messages, or phone calls that claim to be from a specific company.
  • Always contact the company directly to ensure it’s them.
  • Never send money to an unknown person.
  • And, if a payment app is linked to your bank account, don’t leave thousands of dollars in there because it’s more money for scammers to steal.

Wells Fargo also offers the following money-saving tips:

  • Wells Fargo will never contact a customer and request money be sent to themselves or anyone else in order to prevent or stop fraud on their account.
  • Many scams employ a variety of techniques to gain your trust and steal your money, but they frequently begin with a simple phone call, email, or message impersonating a person or company you know in order to trick you into giving them your money.
  • Scammers can use your personal information and spoof their caller ID number to convince you to reveal your access code and steal your money.
  • Never give anyone who calls you unexpectedly your temporary access codes (for example, a one-time passcode) or PIN. Your bank or the government will never request this information from you.
  • Sending money or providing account information to someone you don’t know or a company you can’t verify as legitimate is a bad idea.

Elling was able to recover her payment after months of uncertainty, and she received it on time thanks to Funds Trace. She recognises that without them, she would have been unable to recover her payments and would have lost the money. She continues to encourage others to speak out against payment scams, and she hopes that if they become a victim, they will not be embarrassed to contact reputable fund recovery services like Funds Trace to quickly and effectively recover their funds.

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