Member-only story
My Highest-Earning NewsBreak Story in December was About Zelle Fraud
$870 million in fraud seems to get people’s attention
While Zelle — a bank-based platform allowing users to transfer money directly between bank accounts — seems easy and convenient, it is also a hotbed for fraud.
Over a seven year period, Zelle saw $870 million in fraud on the platform — either fraudulent transactions or, more commonly, users falling victim to fraudulent schemes.
Zelle is run by the big banks — Chase, Bank of America, and Wells Fargo.
While other payment platforms take some affirmative steps to protect users who are victims of fraud, Zelle isn’t so zealous.
In fact:
JPMorgan Chase, Bank of America, and Wells Fargo reimbursed just 38% of fraud claims on the Zelle platform, according to a July Senate report that looked at disputed unauthorized transactions.
Not great.
And banks aren’t really stepping up to make changes, either.
The banks make a lot of money by offering this seemingly carefree service.
The lack of fraud protections leaves customers high and dry, but means more money for the banks that already have a lot of the money.