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US Senators Elizabeth Warren and Robert Menendez have blasted bank-backed P2P payments app Zelle over reports of widespread fraud and scams on the platform.
In a letter to Zelle operator Early Warning Systems, the senators say: “Both your company and the big banks who both own and partner with the platform have abdicated responsibility for fraudulent transactions, leaving consumers with no way to get back their funds.”
Owned by seven of the biggest banks in the US, Early Warning introduced Zelle in 2017. Last year it saw $490 billion in transactions, twice as many as its nearest competitor Venmo.
But, according to a New York Times report cited by the senators, the app has become a “preferred tool for grifters”.
In their letter, Warren and Menendez ask Early Warning for details on procedures for rooting out scams, how it determines whether consumers receive refunds, and numbers on the reported fraud cases and refunds over the last five years.
Write the senators: “The policies of your company and the banks that own and operate on it create a confusing and unfair environment for consumers, who are already facing “rampant” and sophisticated threats from spammers on the platform.”
Financial Services
