GILROY, Calif. (KGO) — Quick payment app Zelle is growing in popularity, but so are scams on the heavily used platform. Among the latest victims is a young South Bay woman who was saving up to buy a headstone for her mother’s grave and lost everything to scammers.
“I was devastated,” said Gabrielle Chavez, 24, with tears in her eyes as she thought of her mother’s barren grave at St. Mary’s Cemetery in Gilroy. “That money was supposed to be for my mother, the headstone, and I was supposed to surprise my father with it.”
The scam has amplified the grief she still feels following the sudden and unexpected loss of her 52-year-old mother, Diana, last year.
“I thought I heard her call my name in the hallway,” Chavez said. “I miss her so much, all of her.”
She lamented that her family could not afford a headstone for her mother’s grave, which is located in the middle of a grassless expanse of the cemetery.
“There’s a lot of dirt there,” she said. “We try to make it pretty with lots of windmills and flowers. But she deserves a headstone.”
Headstones cost more than $3,000, so Chavez, a recent graduate of San Jose State University, worked as a paraprofessional for children with disabilities last year, saving money to buy a granite headstone. .
She planned to surprise her father once she had enough money – and they could place the stone together.
Just days before the first anniversary of her mother’s death, she achieved her goal. But just as she was planning the surprise, the thieves struck.
It all started with a text message on his phone that appeared to be from Bank of America.
“It was exactly the same, like a replica of the text messages sent by Bank of America,” Chavez said.
The message asked if she had just sent $3,500 via Zelle to someone named Jacob Tanner. Alarmed, she quickly replied “no”.
“Two minutes after receiving this message, the phone rang,” she recalls.
“I couldn’t let them get back the money I had saved,” Chavez recalled.
The man said she should transfer the money through Zelle to a supposedly safe account. She needs to use her middle name and part of her last name to create a Zelle account and then send the money there.
“Honestly, I had never used Zelle before. I was so confused,” she said.
She kept asking the man to let her speak to a supervisor, to make sure it was a safe action.
“He said ‘listen, ma’am, ma’am, ma’am, I would never do anything to jeopardize my job.’ ”
However, since the Zelle app was connected to her Bank of America mobile app, she thought it was safe.
This was not the case.
She pressed the send button and $2,000 was taken away, then another $1,500. But instead of landing on a secure account, it went straight to the scammers’ own Zelle account.
“My father came home, I told him what had happened,” Chavez recalled. “He said to check my bank account online, that’s when I found out. It’s gone. All my money, gone. I was devastated. I started crying…that money was supposed to be for my mother.”
The grave remains unmarked, but for photos of her mother, colorful pinwheels, a patch of grass from Home Depot and flowers the family keeps fresh weekly. But no tombstone.
“When I went to sleep that night, all I could hear was these stupid men’s voices (on the phone) saying ‘ma’am, ma’am, ma’am. ”, she recalls.
Chavez filed a complaint with Bank of America, claiming his money was stolen by fraud. The bank denied his request, saying it authorized the transaction even though it was through fraud. Even if she was cheated. Even though it was a scam.
Zelle is now the leading peer-to-peer payment app with $460 billion in transfers last year according to Zelle’s parent company, Early Warning Systems. However, hundreds of millions of those dollars went to the crooks – not to friends and family.
Many blame the fact that banks own and promote the Zelle platform. By connecting the app to a person’s bank account, scammers have direct access to their money. BofA limits Zelle transfers to $3,500 per day, which scammers typically get from their victims. Like Chávez.
She was not only devastated by the loss of her mother and her money, but she also says she lost faith in her bank.
“It wouldn’t happen to me if Bank of America and Zelle weren’t related,” she said. “I’ve been a Bank of America customer since I was 15. I’ve been a loyal customer, and then it happened. They’re just like that, we can’t help you.”
We asked Bank of America why they didn’t refund her money when they refunded other victims of the same Zelle scam. The bank said only that it is reviewing each case individually.
However, the Consumer Financial Protection Bureau has previously said banks must refund “unauthorized transfers” of funds electronically under Regulation E of the Electronic Funds Transfer Act. He said being “fraudulently enticed” into giving access to an account is the rule…but that view is not enshrined in law. Some banks have refunded money to those tricked into sending money through Zelle or other apps, but policies are inconsistent.
Now some US senators led by Sen. Elizabeth Warren, D-Mass, are demanding answers from Zelle and other payment apps on the level of fraud on the platforms. A Senate Banking Committee has summoned the CEOs of major banks to a hearing. Zelle is owned by seven major banks, including Bank of America.
For now, Chavez is still trying to raise enough money for his mother’s headstone.
“The scammers have the money instead,” she said. “They’ve probably already spent it on who knows what.”
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