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Congress says Zelle is facilitating fraud
Zelle is advertised as a fast and easy way to send and receive money, but maybe it's too easy. A new report from Congress claims that Zelle is facilitating fraud. Here's everything you need to know about it.
ATLANTA - Zelle is advertised as "a fast and easy way to send and receive money." Well, maybe too easy, according to a new report from the Senate Banking Committee. It claims Zelle is "facilitating fraud." It goes on to say that fraud is "rampant" on the platform.
A group led by Sen. Elizabeth Warren, who sits on the committee, claims that banks are not refunding the vast majority of people who’ve been defrauded and may very well be breaking the law.
Banks are required to repay customers who’ve been defrauded, which means funds were illegally taken out of an account without authorization.
That’s different from a scam which banks are not obligated to reimburse the victim. A scam means you willing gave your money to a bad actor.
The Massachusetts Democrat invited banks to turn over their Zelle fraud data. Zelle is operated by a consortium of seven banks. Only four complied with this study of how they are doing to help customers who are victims of fraud.
The report says on average these four banks only reimbursed fraud victims 47 percent of the money stolen. And here’s the wide disparity in how banks handle this.
PNC Bank: 14 percent received recourse after being defrauded.
US Bank: 30 percent of their customers were made whole.
Truist: 82 percent of claims were reimbursed.
According to the senator, JP Morgan Chase, Wells Fargo, and Capital One didn't provide the complete data she sought.