JPMorgan Chase is facing a federal investigation over how it handles fraud cases. The Consumer Financial Protection Bureau (CFPB) is looking into whether the bank is doing enough to protect customers who have been scammed and to shut down scammer accounts.
Zelle in the Spotlight
The CFPB is particularly interested in how Chase manages customers who use Zelle, a popular money transfer app. The investigation is also looking into similar concerns about Wells Fargo and Bank of America.
Reimbursement Rates Dropping
A Senate investigation found that Chase, Wells Fargo, and Bank of America only reimbursed victims of Zelle scams 38% of the time in 2023. This is a significant drop from 62% in 2019. The banks have reportedly refused to reimburse a whopping $880 million in disputed Zelle transactions since 2021.
Legal Gray Area
While federal law protects people from unauthorized transfers, it doesn’t offer the same protection when customers are tricked into approving fraudulent transactions. This leaves many victims without recourse.
Chase’s Response
Chase has confirmed that it is aware of the CFPB investigation and is “evaluating next steps.” The bank has declined to comment further.
The Big Picture
This investigation highlights a growing concern about the vulnerability of consumers to online scams and the responsibility of banks to protect their customers. It remains to be seen what action the CFPB will take and how the banks will respond.
