JPMorgan Chase, Bank of America, and Wells Fargo are getting grilled by the Senate over their handling of fraud on the popular payment app Zelle.
The banks are facing scrutiny after customers reported over $456 million in fraudulent Zelle transactions in 2022. The banks allegedly refused to reimburse $115 million of those claims, leaving customers out of pocket.
Senator Richard Blumenthal, who’s leading the investigation, is calling out the banks for failing to protect their customers.
“They’ve decided it’s just the cost of doing business,” Blumenthal said. “But it’s the cost to their customers, not them.”
The banks are being summoned to testify before the Senate’s Permanent Subcommittee on Investigations on July 23rd.
Blumenthal says the banks are aware of the growing problem of Zelle scams, but they’re not doing enough to stop them.
“Criminals are using AI and stolen data to target people,” Blumenthal said. “The banks know this, but they’re failing to protect their customers.”
Zelle, which is owned by seven major banks, claims that less than 0.1% of its transactions are fraudulent.
However, the Senate is not buying it. They’re pushing for answers from the banks about their role in the fraud and what they’re doing to protect their customers.
