If you make such transfers with Zelle, your account may be investigated and closed no matter what your bank is
Zelle has become one of the most populating banking apps in the United States, although users must follow certain regulations.
Founded in 2016 by seven of the United States’ largest banks, banking app Zelle has been in the news in recent times, causing a lawsuit to be filed against Bank of America, JPMorgan and Wells Fargo by the Consumer Financial Protection Bureau (CFPB), who subsequently dropped it.
Many have cited the decision as another example of federal agencies pulling back significantly on enforcement actions taken by the previous administration, with skeptics claiming the Trump administration is turning a blind eye to fraud.
Zelle: “Lawsuit without merit”
Zelle, however, have regularly insisted the lawsuit was “without merit,” releasing the following statement:
“We welcome the CFPB’s decision to drop its lawsuit against the Zelle network. As we’ve said before, this lawsuit was without merit, and legally and factually flawed. We look forward to continuing to provide Zelle, a trusted service, to 151 million enrolled American consumer and small business accounts.”
In an attempt to prevent fraudulent activity and bolster security, Zelle has policies in place which could lead to account sanctions or suspensions, aiming to ensure users comply with regulations set by all of its associated banks.
Adding some $$ to the 🐷 bank pic.twitter.com/7FYyNC73R2
— Zelle (@Zelle) March 11, 2025
Which transactions can lead to Zelle account sanctions?
Zelle prohibits transactions involving goods and services that pose financial or legal risks to users. Restricted activities include unauthorized purchases, illegal activities and commercial transactions which violate Zelle’s user service agreement.
The agreement states that users must not request, send or receive money related to any of the following activities:
- Pharmaceuticals and other controlled substances
- Illegal drugs
- Drug paraphernalia
- Firearms, ammunition or other weapons
- Sexually oriented activities or materials
- Pornography
- Obscene or offensive activities or materials
- Materials or activities that promote intolerance, violence or hate
- Ponzi or pyramid schemes
- Illegal gambling, gaming, lotteries or sweepstakes
- Court-ordered alimony or child support payments
- Traveler’s checks, money orders, equities, annuities, or currencies, including digital currencies, such as bitcoins;
- Counterfeit materials
- Infringement on the copyright, patent, trademark, trade secret or other intellectual property rights of Zelle®, a Network Financial Institution, another
- User or any other third party
- Terrorist funding
- Fraud
- Scams
- Money laundering
- Any other illegal activity or unlawful purpose
Zelle users must also "not use the Service to send or receive payments in connection with your business or commercial enterprise“.
Failure to comply with these rules can result in account suspension, internal investigations and, in some cases, the relevant authorities being notified.
Other potential sanctions for Zelle account holders
Zelle warns that breaching the regulations can lead to further investigation by associated banks and, in severe cases, legal action. The company advises account holders to review the user service agreement and use the platform exclusively for personal transactions with trusted individuals.
Users are also advised not to use Zelle for purchases from strangers or for unauthorized commercial transactions as the platform does not offer buyer protection in case of fraud.
What to do if you Zelle account is suspended
If, for whatever reason, your account is suspended, Zelle recommends contacting your bank directly for more information and to know which steps to take. Depending on the severity of the violation, your account may be reinstated or permanently closed.
Zelle has become one of the most popular banking apps in the United States. thanks to its simplicity, with money able to be transferred almost instantaneously by entering only a contact’s mobile phone number or email address.
For that reason, however, many financial security experts have recommended using payment methods with greater protection for commercial transactions and avoiding sharing banking information with third parties.
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