Zelle banking logo
Source: Twitter (@Zelle)

Consumer Warning: Most Zelle Transfers Can't Be Reversed

Jennifer Farrington - Author
By

Jul. 18 2022, Published 3:59 p.m. ET

Zelle may serve as a fast and convenient way to send money to friends and family, but the digital payment network does have a few flaws. Did you know that once you make a transfer using Zelle, it can rarely be reversed?

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Here’s a look at when a bank will reverse a Zelle transaction and what you should do if you made an error while transferring money via Zelle.

In most cases, once a Zelle transfer is made, the bank won't reverse it.

Zelle banking transfer
Source: Instagram (@zellepay)

Zelle should only be used between people and businesses you trust, and for good reason. Whether you use the mobile app or the company’s desktop website, once the transaction processes, it’s usually final. This means if you send money to the wrong person or for the wrong amount, resolving the issue is usually left up to you.

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According to Zelle, payments can only be canceled if the recipient isn't enrolled in Zelle yet. If you happen to send money to someone who is enrolled with Zelle and your payment amount is incorrect, the money is sent directly to their bank account and can't be canceled.

So, while Zelle does allow people to send money to each other in a matter of seconds, it also puts your money at risk if you make one simple mistake.

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Here's h to cancel a transaction made through Zelle.

Woman on her computer
Source: Pexels

In the event you sent money to a person or business that isn't enrolled with Zelle yet, follow these steps if you want wish to cancel your transaction:

  1. Go to your activity page within your mobile banking app or the Zelle app.
  2. Select the payment you wish to cancel.
  3. Tap “Cancel this payment.”

If that doesn’t work, contact your financial institution right away. Zelle says that once money is sent to another party, they will be notified via email or text message letting them know they received some money. If they create an account within 14 days of the funds being sent, the money will be deposited in their bank account.

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Therefore, if you transferred money via Zelle to the wrong person, you’ll need to act quickly to avoid giving them time to create an account.

What happens if I send a Zelle payment in error and the recipient is enrolled with Zelle?

As mentioned, once a Zelle payment is sent to a party that's already enrolled with Zelle, the payment can't be canceled. So, let’s say you sent money to a friend, relative, or business for the wrong amount, and the transaction was processed. In order to get your money back, you’ll need to contact the person or business directly and ask them to send it back to you.

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If you happened to send Zelle money to the wrong email address or phone number and the money was deposited, you can also open a dispute with your bank. Of course, these matters can take weeks to resolve and don’t always result in you getting your money back once the investigation has concluded.

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Zelle currently doesn't have a protection program in place.

In addition to making it difficult for you to get your money back, Zelle also doesn’t have a protection plan in place like eBay or PayPal, according to Truist. For instance, if you send money to a business via Zelle and the company fails to deliver the item or sends you a defective product, Zelle won't refund you the money.

Instead, you’ll need to contact the business directly and request a refund. Sadly, it's at the business’s discretion whether it chooses to issue a refund.

Simply put, if you’re going to use Zelle, use it wisely and with a party you know you can trust.

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