New US Senate report shows how banks handle fraud, schemes on Zelle

WASHINGTON — Millions of people online payment system Zelle to quickly send money to people they know.

Now, a new report from the U.S. Senate is investigating how banks handle fraud and schemes that happened on the platform.

Zelle’s website tells users that if someone gets access to their account without permission, they should “typically be able to get your money back,” but the report said that’s not always the case.

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The Senate report showed that despite a legal requirement that they reimburse fraud, most users who reported being scammed were rarely reimbursed.

The report went further, saying almost two-thirds of customers who disputed transactions at three large banks, JP Morgan, Bank of America and Wells Fargo in 2023, did not get their money back.

Channel 2 Washington Correspondent Nicole D’Antonio took a closer look at the report and what steps are being taken to keep Americans using payment systems like Zelle safe.

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In the Capitol, lawmakers warned about the rise of scams on Zelle and demanded answers from the company about what they’re doing to protect users.

Between the three banks highlighted in the report, the Senate found only 38% of the $166 million reported in fraud disputes in 2023 were paid back, causing concern for families.

“I heard about the big Zelle one, so that is a little bit concerning to me, but I felt like I try to stay aware [of] what’s on my bank account and I have alerts that come up when I have expenditures,” Melana Orton, a Zelle user, told Channel 2 Action News.

Cameron Fowler, the CEO of Early Warning Services, the company that owns Zelle, testified to Congress about the commitment the company has to protect its users.

“Our success and consumer protection is demonstrated by the fact that over 99.9% of Zelle transactions are completed without any report of fraud or scam,” Fowler testified.

However, the Senate Subcommittee also found the banks allowed broad discretion for employees to deny claims, with little transparency to users. A statement from multiple bank lobbying organizations shared with Channel 2 Action News said that banks cannot stop criminals by themselves and urged Congress to help them find ways to prevent scams in the future.

Zelle teamed up with the Better Business Bureau last year to launch an education campaign for users to protect their money, saying it’s important to never send a payment or give out personal information over the phone.

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