Zelle and Banks Fail To Protect Users From Fraudulent Charges
By Consider The Consumer on 06/21/2022
Zelle and its partnered financial institutions refuse to reimburse its users for fraudulent transfers
Zelle is marketed as being a fast, safe, and easy way to send and receive money with friends and family. However, Zelle users have become targets of scams and fraudulent scenarios.
Zelle and its partner banks fail to credit users who were victims of fraudulent transfers.
According to the plaintiff’s complaint, Zelle and its partnered financial institutions are aware of the widespread fraud on Zelle but have done nothing to help users get their money back.
Have you been a victim of fraud while using Zelle to transfer or receive money? If so, click the button below to tell us about your experience or to learn more about your rights!
According to complaints on file, there are approximately 1,500 banks and credit unions linked to the Zelle service. Those banks and credit unions engage in their own marketing efforts to encourage their accountholders to use the Zelle service. They market Zelle as a fast, safe and secure way for consumers to send money. But, according to users and complaints they filed, this is not true. There are, in fact, undisclosed security risks of using the service that member banks or credit unions did not disclose or omitted from its marketing materials to persuade its accountholders to use Zelle.
This issue is worsened, according to complaints, when the banks or credit unions refuse to reimburse its accountholders for losses using Zelle due to fraud.
The New York Times reported that fraud on the Zelle network is a widespread issue and that the banks and credit unions are aware that it is a problem for users. Quoting an industry representative, the NYTimes wrote:
“Organized crime is rampant,” said John Buzzard, Javelin’s lead fraud analyst. “A couple years ago, we were just starting to talk about it” on apps like Zelle and Venmo, Mr. Buzzard said. “Now, it’s common and everywhere.”
The article continued, “the banks are aware of the widespread fraud on Zelle. When Mr. Faunce called [his bank] to report the crime, the customer service representative told him, “‘A lot of people are getting scammed on Zelle this way.”’ Getting ripped off for $500 was “‘actually really good,”’ Mr. Faunce said the rep told him, because “‘many people were getting hit for thousands of dollars.”’”
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