JPMorgan Chase, Bank of America And Wells Fargo fail to protect customers from hundreds of millions of dollars in scams and fraud every year, a US Senate committee concluded.
At a hearing held by the Permanent Subcommittee on Investigations, Democratic Senator and Chairman Richard Blumenthal said that clients of the banking giants have submitted requests to recover $456 million in 2022all due to scams on Zelle payment network.
Zelle – a network owned by seven US banks including Chase, BofA and Wells Fargo – which allows you to quickly manage online transactions does not sufficiently protect customers, who are often too vulnerable to fraud.
US banks and scams: customers lose 456 million due to Zelle
“America’s banks have a dirty little secret. It’s called Zelle… Zelle presents itself as a quick and easy way to send and receive money. But, as this Committee has discovered, a quick and easy way to lose money this is often what happens on Zelle”: this is Senator Blumenthal’s accusation.
The Permanent Subcommittee on Investigations found that dei $456 million reported lost from customers due to Zelle scams in 2022, $341 million was refunded. According to the panel, 13% of users of Zelle and other peer-to-peer payment platforms report having sent money to someone and later realizing it was a scam.
“Zelle transfers are nearly instant and irreversible, and by the time a consumer knows they’ve been scammed, it’s usually too late to do anything about it”communicated by the committee.
In response to the Senate committee’s inquiry, Zelle released a statement through its parent company, Early Warning Services:
Providing safe, reliable service to consumers is the top priority of Early Warning Services, LLC, the network operator of Zelle, and our 2,100 participating banks and credit unions.
As a result of our ongoing efforts to build on our strong security foundation, less than one-tenth of one percent (0.1%) of transactions are reported as fraud or scams, making Zelle one of the safest ways for consumers to pay people.
However, refund requests of deceived customers remain partly unheard. With the involvement of US banking giants.
