If your friend has ever said, “Zelle is safer than Venmo”, they might want to rescind that statement because the app has been experiencing rampant fraud according to newly released data.
In an issued report on Monday, Senator Elizabeth Warren shared with the public the growing concerns over Zelle’s security. The report found that big banks that partly own Zelle are only partially reimbursing customers who have reported fraudulent transactions on their account(s).
Zelle has partnered with leading banks and credit unions across the US to offer users an alternative to apps like Venmo and Cash App.
Warren, who is known for her criticism of big banks, requested data on fraud and scams on Zelle from seven banks beginning in April. Data from just four banks showed 192,878 cases (collectively worth $213.8 million) where a customer claimed they were fraudulently swindled into making a payment. The banks reimbursed customers in only 3,500 of those cases.
In other cases where it’s apparent that funds had been taken out of customers’ account(s) without their authorization, only 47% of those dollars were reimbursed. Zelle’s owner responded to Warren’s report and said the increased cases reflected the fact the service has become more popular.
In a Congressional hearing last month involving most CEOs of these big banks, Warren pulled out all of the receipts and shared that Wells Fargo and Capital One did not provide data to Warren’s office. The CEO of JPMorgan Chase did apologize to Warren for not getting her the requested data and promised she would have it at the end of that day.