Mobile peer-to-peer payment service has risks, experts say

PEMBROKE PARK, Fla. – Florida business owners are losing thousands while using an online money app that banks such as Bank of America, Chase and Wells Fargo force more than 100 million customers to use.  

Thieves are taking advantage of Zelle, one of the most popular peer-to-peer payment apps. The makers of the app, which launched in 2017, say it should only be used to send money to people you are familiar with and trust. The company's protection program doesn't cover strangers' scams or user error. 

Despite their policy, Zelle's popularity is growing. In April, experts with Early Warning, the network operator behind Zelle, reported the customers of more than 5,391 financial institutions are using the Zelle network. So far this year, users have sent $39 billion through 147 million transactions. 

Zelle is competing with Paypal, Venmo, Apple Pay, Facebook and Cash App. The speedy functionality that makes these apps appealing is what makes them vulnerable to co-artists and hackers using phishing e-mails to get users' login information for irrevocable payments. 

The National Consumer Law Center and the Consumer Union are among the consumer advocacy organizations that disagree with Zelle's policy saying the federal law that protects consumers during electronic banking transactions should also apply to the app's services. 

Late last year, Consumer Reports scored Zelle as the worst in comparison to Apple Pay, Venmo, Cash App and Facebook. The worst scores were on data security and data privacy.