Zelle and the banks that own the popular payments platform are facing new scrutiny over scams on the trillion-dollar network.

In letters to Zelle’s parent company and the banks – specifically JPMorgan Chase, Bank of America, Wells Fargo, Capital One, PNC Bank, US Bank and Truist – lawmakers demand to know more information on scams stemming from social media.

In a lawsuit dropped by the Trump administration, the Consumer Financial Protection Bureau (CFPB) accused Zelle of failing to implement adequate safeguards against fraudulent transactions, allowing scammers to exploit vulnerabilities and trigger $870 million in losses for hundreds of thousands of consumers.

Now, Senator Elizabeth Warren (D-MA), Senator Richard Blumenthal (D-CT), and Representative Maxine Waters (D-CA) are pushing for stronger consumer protections and transparency, noting JPMorgan Chase, Bank of America and Wells Fargo’s 73% transaction dominance on the network.

They’re asking the banks for data on social media scam frequency, bank reimbursement policies and measures to prevent fraud, warning Zelle’s rapid growth has outpaced its security, leaving millions vulnerable.

They urge banks to follow JPMorgan Chase’s lead, which began blocking Zelle payments linked to social media in February.

Failure to act, they say, could prompt stricter regulations.

A separate investigation by the Permanent Subcommittee on Investigations found that JPMorgan Chase, Bank of America and Wells Fargo significantly decreased their reimbursement rate over time, from 62% of disputed transactions in 2019 to 38% in 2023.

Zelle acknowledges fraud on the network but emphasizes its rarity, claiming 99.95% of transactions occur without issues.

 

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney

The post US Lawmakers Probe $870,000,000 in Customer Losses on Zelle, Targeting JPMorgan Chase, Bank of America and Wells Fargo’s Reimbursement Practices appeared first on The Daily Hodl.

Zelle and the banks that own the popular payments platform are facing new scrutiny over scams on the trillion-dollar network.

In letters to Zelle’s parent company and the banks – specifically JPMorgan Chase, Bank of America, Wells Fargo, Capital One, PNC Bank, US Bank and Truist – lawmakers demand to know more information on scams stemming from social media.

In a lawsuit dropped by the Trump administration, the Consumer Financial Protection Bureau (CFPB) accused Zelle of failing to implement adequate safeguards against fraudulent transactions, allowing scammers to exploit vulnerabilities and trigger $870 million in losses for hundreds of thousands of consumers.

Now, Senator Elizabeth Warren (D-MA), Senator Richard Blumenthal (D-CT), and Representative Maxine Waters (D-CA) are pushing for stronger consumer protections and transparency, noting JPMorgan Chase, Bank of America and Wells Fargo’s 73% transaction dominance on the network.

They’re asking the banks for data on social media scam frequency, bank reimbursement policies and measures to prevent fraud, warning Zelle’s rapid growth has outpaced its security, leaving millions vulnerable.

They urge banks to follow JPMorgan Chase’s lead, which began blocking Zelle payments linked to social media in February.

Failure to act, they say, could prompt stricter regulations.

A separate investigation by the Permanent Subcommittee on Investigations found that JPMorgan Chase, Bank of America and Wells Fargo significantly decreased their reimbursement rate over time, from 62% of disputed transactions in 2019 to 38% in 2023.

Zelle acknowledges fraud on the network but emphasizes its rarity, claiming 99.95% of transactions occur without issues.

 

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney

The post US Lawmakers Probe $870,000,000 in Customer Losses on Zelle, Targeting JPMorgan Chase, Bank of America and Wells Fargo’s Reimbursement Practices appeared first on The Daily Hodl.