By: Ken Chase.
Relief may be on the way for those who fell prey to scams on the Zelle payment network, according to reporting from the Wall Street Journal this week. A group of seven of the nation’s biggest banks, including powerhouses like Wells Fargo, JPMorgan Chase, and Bank of America, are apparently working on a repayment plan that would guide them as they provide refunds to customers affected by wrongful transfers.
The ultimate goal is to devise a system to determine whether customers had been tricked into making fund transfers by scammers. For those customers, the reimbursement plan would involve the receiving bank returning the funds to the sending bank, which would then refund the money to the affected customer.
An unnamed source “familiar with the matter” said that the new system could be ready to go into operation early in 2023. Before that, the banks involved in the process would need to test the system to ensure that it was not vulnerable to the same type of scams that caused the Zelle concerns.
That source also suggested that the plan would need buy-in from all of the financial institutions that use the payment system. Any institution that refused to participate could be subject to removal from the Zelle system.
The announced reimbursement plan comes on the heels of growing scrutiny of Zelle from Congress. A report recently released by Senator Elizabeth Warren suggested that data received from just four U.S. banks revealed that they are “on pace to receive scam and fraud claims in excess of $255 million in 2022.”
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