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Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

nytimes.com

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Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#11

Post by toomuchtodo »

valuearb wrote: post #8

Early Warning is owned by a consortium of major banks. Supposedly during development of the apps, if any one bank wanted a feature the team basically had to implement it. Allegedly the team wasn’t allowed to push out the ship date or refuse new features, their only lever was adding more resource. Any wonder why it shipped months late and with the most horrific reviews I’ve ever seen for a mobile app? My guess is fixi…

Fixing problems might not be easy, but as you mention, Early Warning is owned by a consortium of large US banks. Compared to PayPal, Stripe, and other non bank chartered institutions, their resources are effectively unlimited. Those problems are going to get fixed eventually.

Wells Fargo was fined a billion dollars [1] and will continue to operate as an ongoing business. This is a road bump.

[1] https://www.npr.org/sections/thetwo-way/2018/04/20/604279604...

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#12

Post by elvirs »

I noticed that one of the issues with Zelle is that people have accounts at multiple banks that all support Zelle but they use only 1 phone number connected to their banking apps. So sometimes when I send money from my chase mobile banking app to my friend's number who also has chase mobile banking app, the money actually ends up going to his bank of america account because he uses the same phone number on bank of america mobile banking app as well. Sometimes this becomes a serious issue and I think there is no centralized way to change your 'Zelle' settings.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#13

Post by saulrh »

patio11 wrote: post #9
arkades wrote: post #5

Earlier quoted context omitted.

Please elaborate, what is regulation E?

You've asked a question which is approximately "What is a garbage collector?" in terms of depth. Here's the short answer: it's a regulation about electronic funds transfers that US financial institutions, including every bank which offers Zelle, are obligated to uphold. There is a longer version of this answer; your life will probably not be materially improved by knowing it, but you can Google and read at your leisu…

To be sure, is this [1] the part of the regulation that's being invoked by that letter?

1: https://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act#E...

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#14

Post by [deleted] »

JumpCrisscross wrote: post #6
patio11 wrote: post #4

If you ever send money to A and it actually goes to B, and for some reason the bank doesn't fix that the first time you get in touch with them, I recommend getting off the phone and escalating to an on-dead-tree letter: Dear BigBank Legal Department: This is written notice under Regulation E that BigBank has processed the following electronic transaction in error: (Brief recitation of transaction details.) You are re…

> This is written notice under Regulation E that BigBank has processed the following electronic transaction in error Do we know if Reg E [1] applies to Zelle? A safer bet is likely writing to your state financial services regulator. [1] https://www.fdic.gov/regulations/laws/rules/6500-500.html#fd...

[deleted]

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#15

Post by doesnt_know »

Here in kiwi-land, a bank transfer from one individual or business to another is considered the most basic of banking services and all banks support it.

Here are some screenshots from the KiwiBank web interface, (but it's similar for all banks):

https://i.imgur.com/ug9VU5t.png https://i.imgur.com/HRsyQoN.png

There are no fees related to this unless you start doing international transfers, it's just part of the service.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#16

Post by 21 »

> The catch is that the bank, like all the others that use Zelle, only considers transactions fraudulent if the customer did not authorize them.

How can the banks be so short-sighted? Soon a lot of people will hear that Zelle is not secure and they will avoid using it.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#17

Post by joelrunyon »

elvirs wrote: post #12

I noticed that one of the issues with Zelle is that people have accounts at multiple banks that all support Zelle but they use only 1 phone number connected to their banking apps. So sometimes when I send money from my chase mobile banking app to my friend's number who also has chase mobile banking app, the money actually ends up going to his bank of america account because he uses the same phone number on bank of am…

Them tying this to a (cell) phone number is actually VERY annoying. I have multiple bank accounts, but one cell phone. The fact they limit the ability to create more accounts without more than one phone creates all sorts of issues.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#18

Post by RSZC »

toomuchtodo wrote: post #11
valuearb wrote: post #8

Early Warning is owned by a consortium of major banks. Supposedly during development of the apps, if any one bank wanted a feature the team basically had to implement it. Allegedly the team wasn’t allowed to push out the ship date or refuse new features, their only lever was adding more resource. Any wonder why it shipped months late and with the most horrific reviews I’ve ever seen for a mobile app? My guess is fixi…

Fixing problems might not be easy, but as you mention, Early Warning is owned by a consortium of large US banks. Compared to PayPal, Stripe, and other non bank chartered institutions, their resources are effectively unlimited. Those problems are going to get fixed eventually. Wells Fargo was fined a billion dollars [1] and will continue to operate as an ongoing business. This is a road bump. [1] https://www.npr.org/s…

Throwing infinite money and developers at something does not make a good product.

Source: I work for a SaaS aimed primarily at large banks, most of which attempted to build our product themselves before giving up and signing with us.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#19

Post by mikeash »

tedunangst wrote: post #10

Is any of this actually new or unique? If you mail an old school check to the wrong address and never get your concert tickets, do you get your money back?

Probably. Most likely you’d never lose the money in the first place, since the incorrect recipient would be unable to cash the check. If they did fraudulently cash it then you could get that reversed.

Re: Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud

#20

Post by metei »

21 wrote: post #16

> The catch is that the bank, like all the others that use Zelle, only considers transactions fraudulent if the customer did not authorize them. How can the banks be so short-sighted? Soon a lot of people will hear that Zelle is not secure and they will avoid using it.

Lots of banks and Credit Unions have implemented Zelle in app, its the last gasp they have to compete against Venmo. The only upside to Zelle is essentially offering instant transfers for free, where Venmo makes you wait a few days or pay $0.25.
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