Zelle Begins Refunds For Imposter Scams After Government Pressure (reuters.com) 24
According to Reuters, 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. From the report: The 2,100 financial firms on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase and Bank of America, 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. While Zelle disclosed Aug. 30 that it had introduced a new reimbursement benefit for "specific scam types," it has not previously provided details on its new imposter scam refund policy due to worries doing so might encourage criminals to make false scam claims, a spokesperson said. The new policy marks a major shift from last year when bankers, including JPMorgan CEO Jamie Dimon, told lawmakers worried about rising scams that it was unreasonable to require banks to refund transfers that customers were tricked into approving.
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. While Zelle disclosed Aug. 30 that it had introduced a new reimbursement benefit for "specific scam types," it has not previously provided details on its new imposter scam refund policy due to worries doing so might encourage criminals to make false scam claims, a spokesperson said. The new policy marks a major shift from last year when bankers, including JPMorgan CEO Jamie Dimon, told lawmakers worried about rising scams that it was unreasonable to require banks to refund transfers that customers were tricked into approving.
"Zelly" (Score:1)
Does Zelle have any legitimate users, or is it exclusively a scammer thing? I'd never heard of them until a couple of years ago when all the scammers suddenly wanted to use "Zelly" to transfer money. They've mostly switched to Bitcoin now, but wow it was popular for a while.
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My wife uses it all the time for her personal shit.
However, I require her to only use it in conjunction with a sub-account that has limited funds in it. It doesn't hit our main account.
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You can’t use Zelle to pull money out of an account. You can only receive incoming transfers and initiate outgoing transfers. The most you can do is request money from someone.
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I know how it works, thanks.
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Re: "Zelly" (Score:1)
Zelle is awesome. The people that are holding your money run it, and it totally replaces Western Union, if you need to send cash to somebody. Works great locally too. When I'm using it to receive payment for a job, or something similar, typically the sender will do two transactions. The first one for a penny, or maybe a dollar, to verify that the money is going the right place, then they send the rest.
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My local church uses Zelle for donations. You can attend on-line through their Facebook page and then make your donation with Zelle.
That is literally the only time I have personally come across it being used, but then I don't get out very often.
Zelle is it. (Score:2)
Zelle is great. Transfer money between bank accounts almost instantly with no fees. People in other countries have been doing this for years. People in the US only got this in the form of Zelle recently b/c US banks are so backwards. We should have had Zelle decades ago.
These people got scammed b/c they are dumb. It is the same as if they sent a wad of cash to a televangelist.
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Yeah, I like Zelle, it works well and is built into my bank's app. I would rather use Zelle than Venmo due to the lack of fees.
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I don't use it because, hey, fuck them.
I do use Apple Pay Cash for this purpose. Also no fees.
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I've used Zelle a couple of times to send money to coworkers, one who was struggling when her husband was murdered, and one who was buying some stuff for a work party.
It was nice to be able to do it right on my credit union website, and there were no fees.
I don't ever ever do anything invovling money on a cell phone, and I try to install as few proprietary apps as possible. This is an easy, free, and secure way to send someone money.
The banks created this risk (Score:5, Insightful)
They created Zelle and then relentlessly pushed it to their account holders. I've lost count of how many times they've sent me advertising to set up Zelle, how easy it is to transfer money, blah blah blah. They also deliberately avoided implementing adequate security measures to prevent scams, because doing so would impact ease of use, and they wanted to put the responsibility solely on the account holder for avoiding them.
I never wanted Zelle and I will never use it. They keep trying to force me to use it. If you offer a service that is so easily misused, you can't be absolved of liability when people get tricked, because you haven't done your due diligence in educating your account holders on how to use it safely. You created this security hole, so you have to pay.
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Well, to be (slightly) fair to the banks, they were trying to set up an alternative to the security nightmare known as Venmo.
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OK, grandpa.
BTW, be sure to order more checks.
You're spectacularly missing the parent's point, while being a condescending arse. Zelle is a piece of shit, it offers no security measures and no means of preventing scams. Many other countries have had truly pain-free transfer systems for a long time that don't attract scams the way Zelle does. Not supporting Zelle does not mean you're in favour of cheques. Get a clue.
Great, now I have to pay more becasuse of idiots (Score:3)
This isn't credit card fraud where someone has their card stolen. This is Ma and Pa Kettle sending money to someone on EBay or Craigs List and finding out afterward it's a scam. Or lending their phone to a stranger only to find out later they used an app to drain their account. It's not that much different from mailing someone a check and finding out that they don't own the Brooklyn Bridge.
And, in the end, it is the responsible consumer that pays for the ignorance and naivete of the person scammed. At least with credit card fraud, the credit card companies can take action against the vendors that didn't properly verify the credit card user. Refunding Zelle users for getting scammed is just printing money for scammers to keep on keeping on. I have no issue with not refunding money to someone that bought World Series tickets from a stranger and was surprised they were fakes.
I have used Zelle a couple of times, as well as CashApp. I only use them to send money to those I already know, such as family and friends and the guy that mows my yard.
And I took the time to actually understand the risks involved instead of sticking my fingers in my ears and pretending someone else would take care of me.
Re:Great, now I have to pay more becasuse of idiot (Score:4, Interesting)
To be fair, Zelle, and Venmo and other payment apps operate in an environment where you are sending money sight-unseen to people.
Even when I know who the person is, I quadruple check that I have the correct phone number or e-mail address entered and then immediately follow up with the person to see if they received the money.
The problem is that phone numbers and e-mail addresses change fairly often without notice. Add to that the fact that people have whacky e-mail addresses that they set up at a different phase of their life so you can never really align an address with what you know of the person now.
It all adds up to a white knuckle experience every time you have to send money in this way.
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Even when I know who the person is, I quadruple check that I have the correct phone number or e-mail address entered and then immediately follow up with the person to see if they received the money
The best way I've found to deal with this problem is to send the person $1 first, confirm that, THEN send the actual amount of money. ...but really, the solution to most forms of fraud is that, if a call comes in from government/bank/credit card...you say "thank you for the information, I'll call the number on my most recent statement and solve this on a call I initiate. Please tell me which options I should select on the phone tree in order to get to the correct department to resolve this."
NEVER give accou
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I like the $1 idea. I don't know why I hadn't thought of that. Thanks!
"Unauthorized transfers" (Score:3)
.. reimburse customers for payments made without their authorization, such as by hackers, but not when customers themselves make the transfer.
Actually; It seems like these should still be considered Unauthorized transfers. Problem is since the Recipient is fake the Transfer doesn't match what the customer authorizes --- The bank is failing to secure enough information to ensure that the payment being made is to the actual entity that the customer intends the order to be made to. The banks should know better than to allow a transfer without the customer being required to officially state On the order or inside the app itself the actual name of the person or company that funds are to be transferred to, And then the bank should verify the person or company listed on the order is the Legal owner of the account the transfer is destined for.
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The banks created a system that lets individuals send money like they would be handing over cash
That's a problem. Banks cannot expect to create any type of banking system that tries to pretend it's not a banking system with the same safeguards as writing a check, and pretend it is just handing over cash without severe negative reactions from consumers and regulators once a transaction goes wrong. And it Will indeed be the bank at fault at this happens. It doesn't matter how a bank describes the transfer
I prefer zelle over paypal venmo (Score:2)
I prefer Zelle over paypal venmo. Starters it doesnt take my creating yet another account, its more of pushing money than money being wired out.
And I know to many people screwed by paypal because someone who bought them might of done a nono in the past(or other nonsense)