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Major Banks Work Out Reimbursement Scheme for Zelle Fraud

To boost security and consumer trust in Zelle, America’s largest banks are developing a compensation plan for customers falling victim to scams

scam Zelle

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As reported by WSJ, JPMorgan Chase, Wells Fargo and Bank of America along with other banks have started advanced discussions to create a system for refunding customers and each other for illegitimate transfers on Zelle.

Owned by a consortium of US banks, the P2P payment system Zelle is often attracting fraudsters. They send emails and texts or call on behalf of the customer’s bank support, to persuade a victim to send money to a fraudulent account that appears as their own account.

Although Zelle operator Early Warning Services says fraud and scam claims constitute less than 0.1% of all systems, banks still don’t have proper policies in place to protect customers in such cases. Some banks on the Zelle network already refund scammed customers, while others don’t.

Now, the approaches have to be standardised. By agreeing to share liability inside Zelle’s system and guaranteeing to reimburse each other, the banks hope more customers will be protected from fraud and have more trust in using Zelle.

The new rules wouldn’t apply to refunds for goods or services customers say they didn’t receive, or for claimants whose errant payments are the result of typos.

SEE ALSO:

Venmo vs Zelle vs Cash App: pros & cons

Why a P2P app can be a Game Changer for your Fintech Business

How to make and accept payments with Zelle app

Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.