Some Large Banks Said to Reimburse Less than 50% of Consumer Fraud Claims on Zelle
Source: American Banker
Large banks that own the payment platform Zelle on average are reimbursing less than 50% of fraud claims reported by consumers who say money was stolen from their accounts by fraudsters, and that practice could violate federal law, according to a major critic of the industry on Capitol Hill.
A 14-page report about fraud on Zelle released Monday by Sen. Elizabeth Warren, D-Mass., found that large banks that own Zelle's parent company, Early Warning Services, are reimbursing anywhere from 14% to 82% of fraud claims reported by consumers, raising more questions about the wide disparities in bank reimbursements.
The numbers, if verified, point to the potential for massive regulatory enforcement actions against banks by the Consumer Financial Protection Bureau. Alternatively, because banks are required by the Electronic Fund Transfer Act to investigate when a consumer alleges fraud, the data may also indicate that consumers are attempting to game the system or that a large percentage of fraud claims simply cannot be verified by banks.
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