Fraud, scam cases increasing on Zelle, Senate report finds

📆 10/3/2022 11:57 AM

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📆 10/3/2022 11:57 AM
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Incidents of fraud and scams are occurring more often on the service Zelle, according to a report coming out Monday from the office of Sen. Elizabeth Warren.

The report obtained by The Associated Press also found that the large banks who partly own Zelle have been reluctant to compensate customers who have been victims of fraud or scams. For instance, less than half of the money customers reported being sent via Zelle without authorization was being reimbursed.

The data for individual banks shows the increase in fraud and scams. PNC Bank had 8,848 cases on Zelle in 2020, and is on pace to have roughly 12,300 cases this year. US Bank had 14,886 cases in 2020 and had 27,702 cases in 2021. Truist had 9,455 cases of fraud and scams on Zelle in 2020, which ballooned to 22,045 last year.

Banks are required under the Electronic Fund Transfer Act to repay customers when funds are illegally taken out of their account without authorization. Banks have argued that in cases of fraud — meaning a customer's account becomes compromised somehow and they send an unauthorized payment — they do reimburse customers.

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