OCTOBER 03, 2022New Report by Senator Warren: Zelle Facilitating Fraud, Based on Internal Data from Big Banks
This new report comes after months of Senator Warren urging the big banks to provide this data.
Washington, D.C. – Today, United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking, Housing, and Urban Affairs Committee (BHUA), released a new report revealing rampant fraud and theft on Zelle. This new report contains the findings of Senator Warren’s investigation of Zelle fraud data provided by banks. It finds that fraud is growing on the platform and that the banks are not refunding the vast majority of defrauded consumers, breaking their promises to their customers and potentially violating federal law.
In a hearing before the BHUA Committee on September 22, 2022, Senators Warren and Bob Menendez (D-N.J.) called on big bank CEOs to provide information on the volume of and procedures for addressing fraud on their Zelle platform. Senators Warren and Menendez received a commitment from several CEOs that they would provide the requested information to Congress. While JPMorgan Chase, Wells Fargo, and several other banks still refused to make key information about fraud public, several other banks did provide the information.
“New internal data from the big banks shows that their platform Zelle is rampant with fraud and theft, and few customers are getting refunded -- potentially violating federal laws and consumer rules. Despite their CEOs' promises to the Senate Banking Committee, JPMorgan and Wells Fargo have still not turned over complete data, and I'll keep fighting for stronger consumer protections and to hold all these banks accountable for abuse.” said Senator Warren.
The report findings show that:
The CFPB has regulatory authority over Zelle and other peer-to-peer platforms including Zelle, and is reportedly considering issuing guidance clarifying the scope of “Regulation E.” The agency must act to clarify and strengthen “Regulation E,” and to include fraud in the Regulation’s error resolution purview.
Over the past months, Senators Warren, Menendez, and Reed have led oversight letters requesting information about fraudulent transactions on Zelle. In April, Senator Warren led a letter to Early Warning Services asking the company to disclose how many reports of fraud it had received from users since the beginning of 2018. Early Warning Services provided little data on the volume of fraudulent transactions occurring on Zelle. In July, Senators Warren, Menendez, and Reed led letters to each of the banks that own Zelle’s parent company requesting information about the Zelle scams and frauds its customers have reported to them. With the exception of Truist, the relevant banks testifying provided little to none of the information the lawmakers requested, until Sen. Warren and Menendez again pressed bank CEOs for this information at the September BHUA hearing.
Sélectionné par Virginie GASTINE MENOU
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