Sat. Dec 3rd, 2022

From today’s New York Times:

Fraud on Zelle, the instant-payments system owned by seven of the nation’s biggest banks, has been rising in the past year, leaving hundreds of thousands of defrauded customers with little recourse for recovering their stolen cash.

In recent weeks, Senator Elizabeth Warren, Democrat of Massachusetts, has been demanding answers from banks about the scope of the problem. She grilled bank leaders at a Senate hearing last month and followed up with a scathing report about the data that a handful of banks sent her. Now, she’s targeting one particular bank for fraud levels she called “profoundly troubling”: Wells Fargo.

Days after the hearing, Wells Fargo sent Ms. Warren, who sits on the Senate’s Banking Committee, information she had sought for months about its fraud claims rate on Zelle transactions. The numbers raised alarms, Ms. Warren said in a letter she sent last week to Charles Scharf, the bank’s chief executive.

The data indicates that Wells Fargo customers “are reporting fraud and scams on the bank’s Zelle platform at a rate that is nearly 2.5 times higher this year than it was in 2019, and that the rate of reported fraud and scams this year is more than twice as high for Wells customers than it is for customers of other banks,” Ms. Warren wrote.

Wells Fargo pushed back on her accusations.

“We don’t believe the numbers in a recent report are done on a comparable basis, and therefore the analysis is misleading and inaccurate,” said Amy Bonitatibus, a spokeswoman for Wells Fargo. Based on the data we’ve seen, our Zelle fraud and scam rates are consistent with the industry.”

Read the complete story here.

By Editor