JPMorgan Chase, Bank of America and Wells Fargo are failing to protect customers from hundreds of millions of dollars in scams and fraud per year, according to a US Senate panel.
At a hearing held by the Permanent Subcommittee on Investigations, Democratic Senator and Chairman Richard Blumenthal said the banking giants’ customers submitted claims to recover $456 million in 2022 – all due to fraud and scams on the payments network Zelle.
“The banks of America have a dirty little secret. It’s called Zelle…
Zelle markets itself as ‘A fast and easy way to send and receive money.’ But, as this Committee has found, a fast and easy way to lose money is often what happens on Zelle.”
Senator Blumenthal says Zelle – a network owned by seven US banks including Chase, BofA and Wells Fargo – creates a veil of security while leaving customers far too vulnerable to fraud.
“Zelle transfers are nearly instant and irreversible, and by the time a consumer knows they’ve been scammed, usually it’s too late to do anything about it – at least according to Zelle and according to the banks that own, control, and in effect operate Zelle…
Zelle and the banks that own it offer to customers the appearance of the trust they feel they deserve. But the risks there are real and present, and they simply are failing to protect consumers in the way that they deserve.”
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