One of the most popular way for scammers to get your money if you’re in the USA is to use Zelle. For those of you who don’t know what Zelle is, it’s a US based instant money transfer service that allow individuals to send money from one US bank account to another one. But as I said, scammers have used this for years to scam money from victims. And Zelle hasn’t done anything about it claiming in short that it’s the victim’s fault. That however seems to be changing:
Banks on the payment app Zelle have begun refunding victims of imposter scams to address consumer protection concerns raised by U.S. lawmakers and the federal consumer watchdog, in a major policy change.
The 2,100 financial firms on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase (JPM.N) and Bank of America (BAC.N), began reversing transfers as of June 30 for customers duped into sending money to scammers claiming to be from a government agency, bank or existing service provider, said Early Warning Services (EWS), the banks’ company that owns Zelle.
That’s “well above existing legal and regulatory requirements,” Ben Chance, chief fraud risk officer at EWS, told Reuters.
Federal rules require banks to reimburse customers for payments made without their authorization, such as by hackers, but not when customers themselves make the transfer.
Now you have to ask, why is Zelle doing this after saying that this isn’t their problem? The answer is simple:
Under pressure from [Senator Elisabeth] Warren and other lawmakers, the Consumer Financial Protection Bureau (CFPB) considered compelling lenders to reimburse scams, but Zelle’s changes have so far satisfied the agency, said a person familiar with the matter.
This is simply a move by Zelle to make sure that it isn’t hit with legislation that it doesn’t like. Which I am fine with. Here’s the thing. If you make companies like Zelle responsible for scams, they’re going to up their game in terms of protecting consumers. Because companies more often than not will take the path of least resistance when it comes to protecting consumers and only do so when forced. And Zelle was forced in this case. Hopefully we see more of this in the future.
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This entry was posted on November 13, 2023 at 8:46 am and is filed under Commentary with tags Scams. You can follow any responses to this entry through the RSS 2.0 feed.
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Zelle Is Now Issuing Refunds If You’ve Been Scammed
One of the most popular way for scammers to get your money if you’re in the USA is to use Zelle. For those of you who don’t know what Zelle is, it’s a US based instant money transfer service that allow individuals to send money from one US bank account to another one. But as I said, scammers have used this for years to scam money from victims. And Zelle hasn’t done anything about it claiming in short that it’s the victim’s fault. That however seems to be changing:
Banks on the payment app Zelle have begun refunding victims of imposter scams to address consumer protection concerns raised by U.S. lawmakers and the federal consumer watchdog, in a major policy change.
The 2,100 financial firms on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase (JPM.N) and Bank of America (BAC.N), began reversing transfers as of June 30 for customers duped into sending money to scammers claiming to be from a government agency, bank or existing service provider, said Early Warning Services (EWS), the banks’ company that owns Zelle.
That’s “well above existing legal and regulatory requirements,” Ben Chance, chief fraud risk officer at EWS, told Reuters.
Federal rules require banks to reimburse customers for payments made without their authorization, such as by hackers, but not when customers themselves make the transfer.
Now you have to ask, why is Zelle doing this after saying that this isn’t their problem? The answer is simple:
Under pressure from [Senator Elisabeth] Warren and other lawmakers, the Consumer Financial Protection Bureau (CFPB) considered compelling lenders to reimburse scams, but Zelle’s changes have so far satisfied the agency, said a person familiar with the matter.
This is simply a move by Zelle to make sure that it isn’t hit with legislation that it doesn’t like. Which I am fine with. Here’s the thing. If you make companies like Zelle responsible for scams, they’re going to up their game in terms of protecting consumers. Because companies more often than not will take the path of least resistance when it comes to protecting consumers and only do so when forced. And Zelle was forced in this case. Hopefully we see more of this in the future.
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This entry was posted on November 13, 2023 at 8:46 am and is filed under Commentary with tags Scams. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.