The banks that own Zelle, a popular peer-to-peer payment platform, should do more to protect consumers from scams and fraud.
That’s according to U.S. Senator Richard Blumenthal, who chairs the U.S. Senate Permanent Subcommittee on Investigations.
The subcommittee held a hearing last month on Zelle and other payment apps.
Blumenthal said it's unacceptable that Zelle does not reimburse defrauded consumers.
The company controls about 70% of payment app transfers.
“The transfer in money is virtually instantaneous and permanent. And it is irreversible,” Blumenthal said.
The banks should protect transfers the same way credit card transactions are protected, he said. “The truth here is the banks are responsible. They own, operate and control Zelle. They are the ones that should be held accountable,”
Blumenthal has invited the largest banks that own Zelle to testify before his committee: Bank of America, JP Morgan Chase and Wells Fargo.
The company said its rules were expanded last year to require participating financial institutions to reimburse consumers for certain scams.
Zelle and other payment apps were the third most common fraudulent payment method reported to the Federal Trade Commission in 2022.
