IRVINGTON, New Jersey (WABC) -- If you're like a lot of us, you move money using mobile payment apps like Zelle, PayPal and Venmo. In fact, a recent survey found 3 out of 4 millennials -- and even 50 percent of baby boomers -- use one.
But before you click send, listen up. 7 On Your Side's Nina Pineda combed the apps' terms and conditions and found a rule that could cost you big bucks if you make even the smallest of mistakes.
Mabel Obasi was multi-tasking; she was cooking for her kids and repaying a debt using a mobile app. Using the mobile payment app, Zelle, she sent $2,500 to a friend who had lent her rent money.
The Irvington mom made a critical mistake: she accidentally switched the last two digits of her friend's phone number, entering an 06 instead of 60. Then she hit send.
"I'm just a teacher, so to lose $2,500, it's a lot," Obasi said. "So now, the money, instead of going to the person, instead went to somebody else."
She didn't catch her mistake until days later, only after her recipient said he didn't get the money.
Obasi asked her bank, Wells Fargo, to investigate, but the bank told her that "it was unable to reverse the transaction."
In one click, her cash was gone.
"If you're initiating the transfer, you're on the hook, according to Zelle's terms and conditions," said Mandi Woodruff of MagnifyMoney.
Woodruff underscored what both Wells Fargo and Zelle told us: Ultimately, it's up to the customer to double and triple check the recipient's information before sending money.
Zelle said Obasi's money was gone immediately after hitting "send." If the recipient has a Zelle account, the transaction "cannot be canceled."
"These things can be very safe. They're obviously very convenient," said Woodruff. "But always ask yourself, 'Would I be comfortable sending this money in the mail in an envelope with cash?' If the answer is no, then probably don't do it."
As for Obasi's money: 7 On Your Side also called the bank that received her money. It said they work on these requests on a "case by case basis" and they are trying to work with the customer who inadvertently received the funds to try and return them.
Going forward, Mabel Obasi has a new golden rule when sending green: she'll never use Zelle again.
Early Warning Services, the network operator behind Zelle, issued the following statement:
"While we cannot comment on specific consumer payments due to customer privacy and confidentiality, we do work with consumers, and their banks, to thoroughly investigate all claims. We want every experience with Zelle to be a positive one, and we listen to consumers to constantly improve our service."
After the incident, Wells Fargo also released a statement:
We cannot comment on specific customer situations due to customer privacy and confidentiality. When we become aware of an issue encountered by a Wells Fargo customer using Zelle, we work directly with our customer and have a thorough investigation process to research all claims. We want every customer to have a positive experience using Zelle. We're listening to our customers, and continually applying insight from them to improve this service. Our goal is to ensure that the payment experience is easy and simple, and that the payments quickly arrive to intended recipients.
As more and more people use Zelle for the first time, Zelle wants their customers to know the following:
- Before sending a Zelle payment to a new recipient, confirm the recipient's information. Make sure the person receiving the payment provides you with their most up-to-date email address or mobile phone number.
- Double check to be sure you've entered the recipient's correct token - email address or phone number - prior to sending a payment.
- Remember: When you make a payment with Zelle to a registered email address or mobile phone number, it's delivered almost instantly. It's very important to enter the correct information since the payment cannot be canceled.
- Zelle is intended to replace instances where cash and checks are being exchanged, and as a result, you do not have the same protections associated with a credit card or debit card transaction, such as the ability to dispute purchase transactions.
- Our customers tell us how much they value using Zelle for convenient, fast and secure P2P payments with friends, family and people they know and trust, and they are showing us by the increase in the number of customers using the service every day.
More information on Zelle can be found on Wells Fargo's website.
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