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Warren urges Wells Fargo CEO to tackle market scam –

The bank is under pressure to do something about Zelle’s fraud.


With Zelle, which was rolled out in 2017, customers can send money to others through their banking app on their phone or computer. There are no fees or charges for transferring funds and the money is deposited directly into the recipient’s account. Initially, more than 30 U.S. banks and credit unions adopted Zelle, and within a year, 95 million customers had access to the service, surpassing PayPal’s popular instant transfer app, Venmo. In theory, Zelle is simple to use, fast and efficient. However, recently a Zelle Facebook Marketplace scam has been circulating, taking advantage of its large pool of customers.

Fraudulent contacts sellers asking to buy an item they listed for sale by paying with Zelle. If the seller accepts this payment method, then the buyer asks for their email address to send the money through the app. However, the funds never arrive. Instead of facing the money, the buyer sends a bogus email supposedly created by Zelle alleging that the buyer has paid for the item and that the seller must upgrade to a Zelle business account in order to receive the payment. It costs a few hundred dollars.

Photo by Anderson Guerra from Pexels

In a letter dated earlier this month and made public over the past week, Senator Elizabeth Warren disclosed to Wells Fargo CEO Charles Scharf what she called an “alarming pattern” of customer disregard “compounded by denial from the bank to make its Zelle scam and fraud data public.” It’s almost as if Zelle is deliberately deleting information about the scam in order to take advantage of the many business accounts created to complete transactions.

In his letter, Warren, a member of the Senate Banking Committee and well-known banking critic, said Wells Fargo customers are reporting the scheme this year at “a rate nearly 2.5 times higher than in 2019 and twice higher than those of other banks. .” She and other lawmakers are seeking to hold the bank more accountable by releasing information about what’s going on and ensuring customers are better protected from fraudsters.

Thousands of people use the Facebook Marketplace to buy and sell goods easily online, either to be shipped or picked up in person. Social media users simply place an item on the marketplace, which is similar to Craigslist (a site that typically only includes in-person sales). Many people have had success doing business through Facebook, but unfortunately the scam has made many one-time Marketplace buyers much more cautious about continuing to use it. It still has to go out and create a safe place of exchange again.

In a statement responding to Warren’s letter, a Wells Fargo spokeswoman rebutted the claims, saying, “As a member of Zelle, we’ve seen transactions double in just three years, but in 2022, 99.94% of our customer transactions were without incident. We do not believe the figures in a recent report are on a comparable basis, and therefore the analysis is misleading and inaccurate,” bank spokeswoman Amy Bonitatibus said. She added that their data showed that Zelle’s fraud and scam rates were consistent with the industry and not twice as high as other banks.

Sources:

Venmo killer? Banks Deploy Faster P2P Payments with Zelle

Elizabeth Warren singles out Wells Fargo for Zelle Fraud’s ‘alarming pattern’

Wells Fargo fails to protect customers from Zelle scams

Zelle Facebook Marketplace Scam: How to Recognize and Avoid This Scam

#Warren #urges #Wells #Fargo #CEO #tackle #market #scam

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