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Arizona man loses $7,500 to 'Pay Yourself' scam

An Arizona man lost $7,500 to a scam that has been fooling people nationwide.

PHOENIX — How could transferring money to yourself be a scam?

$7,500 later, Marshall Cheeseboro found out.

Now his money is in someone else's pocket, and he can't get it back.

“So there was a $500 invoice from a Bitcoin sale that was charged to my account," Cheeseboro said. 

He knew the charge was a scam. He didn't own Bitcoin and the notice was from a PayPal account he hadn't used in years. 

What he didn't know was that the notice of the scam, WAS the scam. 

He called the number on the message and got what he thought was a representative from his bank. 

The voice on the other end of the phone told him not to worry, he could block that unexpected $500 charge. All he had to do was send himself money through two money transfer services he'd used before Zelle and Cash App.

The bank was going to send him a one-time security code that he'd need to repeat back. He did and transferred the money to himself.

That was all it took. 

"They changed the routing info," he said.

It's called a "Pay Yourself" scam, and it's become so popular that Zelle, which is owned by Bank of America, has produced a video explaining to customers how it works. Bank of America has even sent the video out in email blasts to its customers, but people are still getting taken. 

Here's how Cheeseboro got scammed: The one-time security code that he was sent was legit and was from his bank. the voice on the other end of the phone call asking him to repeat that code was fake.

Likely, the scammer already had the rest of Cheeseboro's personal information... Experts say that's readily available for sale in places like the Dark Web. 

Once the scammer had that one-time code, they could go into Cheeseboro's cash transfer accounts and change just one thing: his own bank routing number. 

Now, when Cheeseboro transferred money to himself, the routing number in his profile sent it to the scammer instead. 

And because cash transfer apps are instantaneous, that money is likely gone for good. 

"There's really nothing you can do about it," Cheeseboro said. 

A spokesperson for Early Warning Services, the network operator of Zelle, sent a statement saying  "Protecting Zelle® users from fraud and scams is one of our top priorities. That is why we are achieving more than 99.9% of payments sent without any report of fraud or scams. This Pay Yourself Scam education video from Zelle® is just one example of how we are working with our bank partners to educate consumers about scam trends and how to avoid them. Our Zelle® Financial Education Center also provides helpful resources for scam prevention."

The spokesperson also sent tips for avoiding this type of scam:

  • Watch out for spoofed texts or caller IDs used in social engineering scams. If you receive a text or call from someone claiming to be your bank, make sure to verify they are legitimate by calling them directly.
  • Be on the lookout for scammers calling and pressuring you to send money to yourself.
  • Never share one-time passcodes sent to you by your bank with anyone.
  • Immediately contact your bank directly if you suspect unauthorized activity.

Cheeseboro said Zelle did cancel the money transfer, but Cash App did not respond to questions from 12News. 

Bank of America, which is an owner of Zelle and also the bank that Cheeseboro uses, also sent a statement, adding that BofA also includes an extra warning when transferring money.

"It’s unfortunate when people fall for scams like this and send money to scammers posing as a legitimate business. We alert clients during the transaction if they are sending money to a new recipient that they should only send to people they know and trust and never transfer money as a result of an unexpected call or text. Additionally, they see: “BEWARE: Bank of America will never ask you to transfer money to anyone, including yourself. Don’t transfer money as a result of an unexpected text or call.”  To move forward with the transaction, they need to click OK. We also have a number of measures in place to proactively warn clients about scams, and we periodically reach out to customers with information about how to stay safe and avoid scams."

Cheeseboro said he did see that warning, but believed the scammer on the phone when he said clicking OK was the only way to get his money back. 

"They said there was no other way for me to get my money back," he said, "but here I am...still with no money."

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