Why does Clark hate Zelle so much? Someone walk me through the risks

I have Zelle attached to my Charles Schwab Bank checking account, and I only keep a few dollars over there at a time, and I pay my lawn guy with it. Once Zelle is at one bank, Zelle cannot be attached to another one. I use a highly complex password at Schwab, and app-based multi-factor authentication. I never use public wifi and Schwab. Honestly, I don’t see the risk. Can someone explain it to me? I do see that once I send money using Zelle, it essentially creates a debit card transaction. Is the concern that the transaction details are not encrypted and exposed in plain-text, and can be intercepted over the Internet? Is it something stupid like that?

POSTSCRIPT - I put this on Reddit, and the consensus seems to be that if you don’t send money to untrusted people, and if you don’t interact with any parties who apparently have sent you unsolicited money which would expose you to emotional manipulation, then you’re safe. The Zelle app seems to be safe from a technology perspective.

I am not familiar with how zelle works but.

Why don’t you set up your lawn guy on Schwab Bill Pay as a Vendor and pay him from there? That is what I do.

Although I guess there is little risk if you move the money to Zell immediately before you send it out.

I did read that once you hit send on Zelle, it is gone… no chance to cancel

If I use billpay, there will be a long delay for him… a paper check will be sent. I don’t want to do that to him, and I don’t want to leave cash under the doormat, and he forgets to cash checks sometimes. Zelle solves it all

The problems that have happened with Zelle have been where someone gets a phone call from someone pretending to be from their bank and they talk them into making a transfer. Not sure why that makes it risky for someone who isn’t going to fall for that.

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Unfortunately, people do fall for scams like that. I just hang up on them. However I did fail a phishing simulation email at work, and I had to retake cybersecurity LOL

Hi! Clark’s warnings about Zelle has several layers.

I. It’s owned by several of the big monster mega-banks who only have their best interests in mind.
2. The banks automatically attach it to most bank accounts without permission or any opt-in feature, which misleads many customers into thinking it’s “bank approved” or safer than the other payment apps.
3. His biggest issue is that there are no consumer protections. If someone steals money out of your regular bank account, the banks are responsible for replacing your money, if it’s a valid theft claim. If someone steals money out of your account via Zelle, the banks are not liable and will not replace the money although they own the app. This is why they are pushing their customers to use Zelle - no responsibility.

Sounds like you’re using Zelle the best way - by only having a small amount of money in the account it’s attached to. This is the way Clark recommends we use ALL payment apps, so that criminals don’t have access to your housing & food money. Unfortunately, many people are not doing this and end up losing all of the money they need for essential monthly expenses in their accounts.

Hope this sheds more light!

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  1. is the big issue isn’t it

I agree about there being no protections from someone stealing money but all the cases I’ve read are people who were swindled while on the phone and following instructions from a scammer. Shouldn’t happen but it does seem to.

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Monster bank ownership is bad enough. The killer for me is the inflexibility. One account and done? Oh and as I recall, a serious limit on how much you can send. Forget it.

My lawn guy gets a check every month on a schedule, all done by bill pay. Matters not that it takes a piece of paper in the US mail. Scheduled timely and gets there timely.

Just wait until he hears who owns Venmo!

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@ochotona It looks like you’ve received some great responses here. Sharing this short clip of Clark’s passionate rage against Zelle in case it helps shed more light: Clark Rage: Deactivate Zelle Today - YouTube

Tell Clark that video doesn’t make him look good. He seems emotional and unhinged.

From what I can tell, Clark’s issues are:

  1. It’s owned by the banks themselves;
  2. You’re out of luck if you are a victim of fraud; and
  3. You may not be able to turn it off.

#1 is simply Clark’s bias, which I personally disagree with. Big banks, small banks, and credit unions can all be swampy in their own ways. Whenever he mentions the giant monster mega banks, I just insert “crappy banks with crappy customer service” in my mind.

On #2, I’m not sure how that makes it any different from Paypal, Venmo (owned by Paypal), CashApp, or any others. Everyone will be pointing finger at others.

#3 would be a big problem if it were true. I’m not sure it is. When I log in to my Wells Fargo app, there is a link to Zelle, but it links me to a process to sign up for it. I can’t remove the link per se, but I also can’t use it without signing up. Maybe other banks implement it differently. I suspect Clark doesn’t bank with any of those companies.

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He doesn’t like that it gets activated without the account holder’s consent at some banks. Then add that to there being no protection against fraudulent use.