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Warning: Do Not Use Zelle or Venmo to Pay People on eBay, Facebook Marketplace or Craigslist

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Good afternoon everyone, I hope your Presidents’ Day Weekend is off to a great start.  I just spent the last hour or so reading about horror stories where people were scammed on Craigslist when they paid with Zelle (Tech Crunch and Reddit). Since I wrote a post on how to send money to friends (or other bank accounts) with Zelle, I felt that it was my duty to inform my readers about this scam.

After reading the Tech Crunch and Reddit posts, here is how the scam works. The buyer sees tickets on Craigslist and reaches out to the seller. The seller says they can transfer the tickets to the buyer immediately after payment is received and recommends using Zelle, since that is their preferred way to be paid. Luckily, the buyer has used Zelle in the past and *thinks* that since the service is offered by their bank and other big banks, that all transactions are protected. After the buyer pays the seller via Zelle, the seller disappears and stops responding to calls, texts, and emails. The buyer complains to their bank, but since Zelle is set up to pay friends and family members, there is no purchase protection offered through Zelle, therefore, their bank cannot help them recover their money.

a screenshot of a computer

Long story short, Zelle and Venmo are peer-to-peer payment methods that should only be used to pay friends and family members. ZELLE AND VENMO DO NOT OFFER PURCHASE PROTECTION, so if you pay for goods or services with Zelle or Venmo, you are out of luck if anything goes wrong. From the bank’s perspective, since you initiated the Zelle or Venmo transaction, they are not liable for fraud and provide no purchase protection to their users.

If you do want to pay for goods or services online and do not know the person, you are strongly recommended to use a credit card through PayPal (even if you have to incur a fee). Even though PayPal is a company that people love to hate, PAYPAL DOES OFFER PURCHASE PROTECTION that is able to reverse transactions and get your money back (most of the time, at least).

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Image source: https://www.paypal.com/us/webapps/mpp/paypal-safety-and-security

Scammers are always coming up with new ideas and new ways to scam people, so always be aware whenever you are paying for a product or service. The best approach to avoid being scammed is to think like a scammer. If you were trying to scam someone, what would you do or say? You should be able to spot the vulnerabilities and prevent being scammed.

If you have any other advice, please let me know. If you have any questions, please leave a comment below. Have a great Presidents’ Day Weekend everyone!

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24 thoughts on “Warning: Do Not Use Zelle or Venmo to Pay People on eBay, Facebook Marketplace or Craigslist

  1. sj0

    careful with Venmo. Scammer buyers CAN reverse payment through Venmo. Some people have gotten paid and handed off the merchandise only for the charges to be reversed.

  2. chrisflyer

    A friend of mine got scammed buying something on craigslist. He sent money to a stranger using Paypal. I was actually a bit surprised that Paypal gave him his money back without too much hassle. I’m glad he didn’t use Zelle or Venmo!

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  5. meed18

    A buyer definitely shouldn’t use venmo or zelle to pay a seller they don’t know on craigslist, but the flip side is that a seller shouldn’t use paypal because they almost always side with buyers when there is a dispute. What does that leave – cold hard cash!

    1. Grant Post author

      If you follow PayPal’s seller protection policies, you should have less issues. Tracking and delivery confirmation go a long ways to help sellers.

  6. Dawn Hunt

    Important advice! I have to say, Paypal does honor it’s protection, I sent a phone back that I got from a seller on Swappa (it was not 100% functional) but didn’t receive my money back even after a month. I got paypal involved, they took several weeks, but reversed the charge for me. I didn’t think of the fact Zelle doesn’t have it. Thanks for alerting everyone to this!

  7. Rachel

    Thanks man. I was about to pull the trigger on concert tickets but your article came up and made me second guess this “amazing deal” . They would only take Zelle because their Paypal account was “locked out”.

    There were also too many other “things” I couldn’t overlook. First, they had 2 tickets but were easily willing to split up to just 1. And they didn’t have a social media account or Facebook account for me to verify them with. I expressed my concerns about this being a scam and they said “I swear on my mother’s life these are legitimate.” Because that’s what a scammer would say.

    Anyway it may have been legitimate but I didn’t want to take the chance. Thanks for saving me a potential scam.

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  9. Major Gear

    What about if you are making the sale in person, but they want to pay you with Venmo or Paypal? What is the safest way to do that? Including not doing it, of course.

    1. Grant Post author

      For in person transactions, I would accept cash or Venmo. If they pay you via PayPal, they could later file a claim with PayPal saying that you never gave them the item or shipped the item to them.

  10. Major Gear

    I’ve started using Venmo for my ( always in person ) sales.It’s just too convenient to pass up for a few reasons.

    1) Depositing the money is easy. I don’t use a physical bank, so cash deposits are difficult. Before Venmo, I’ll purchase money orders and use my bank’s Mobile Check Deposit app to deposit them. With Venmo, I click “deposit” and in 1-3 days the money is in my bank account.
    2) No counterfeit currently – When I sell an expensive items, like $1000 or higher, the risk that I’m getting counterfeit bill goes up. With Venmo I don’t have to worry about that.
    3) Time – The buyer doesn’t need to stop by the ATM before we meet. We can meet immediately and complete the transaction.
    4) I feel more relaxed not having to count money in front of the buyer. I feel like I’m telling them that I don’t trust them when I do that, but it’s necessary when using cash.

    1. Grant Post author

      I agree with you 100%. When I meet someone in person, I prefer to pay or get paid via Venmo. It is just so easy and convenient for both parties.

  11. Yaz

    Can I just say that yes cash is king but there are many many people who try paying with counterfeit bills out there. Best thing to do is to obtain one of those pens that test for authenticity of the cash you receive and do that right there on the spot.

  12. Heather ba

    What about the other way around..I’m selling a car and they come on fast response with paying me now using zelle and sending someone to pick up car that day..I don’t trust this..I have said cash only but they say can’t withdraw on debit card waiting on new one to arrive and when asked why can’t they go to bank withdrawl they say it’s too far drive..not sure what to say in this situation

    1. Grant Post author

      Hi Heather, that sounds suspicious. If they want to pay with Zelle, they should have the cash in their bank account. Theoretically, you should be able to meet at their bank branch and have them get you a cashier check or withdraw cash from their checking account. Trust your gut / instinct and don’t accept a big Zelle payment from a stranger.

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