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Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

warren.senate.gov

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Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#21

Post by kasey_junk »

arcticbull wrote: post #14
stephenhuey wrote: post #13

Earlier quoted context omitted.

I see other comments here saying it's intended to be digital cash, but as a programmer it makes no sense that we Zelle users cannot find out the identify and ultimate destination on the other side of the funds transfer - it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. About 4 years ago, I got scammed when I sent a payment to a local preschool and later found ou…

> ... it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. FedNow is here and live.

Lots of other countries offer direct to consumer rails. I think fednow is an absolute improvement over ACH but it’s still way behind some of the peer payment systems out there.

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#22

Post by phpisthebest »

wmf wrote: post #8
costco wrote: post #6

Earlier quoted context omitted.

There is no way to do what the senators want without undermining the entire point of Zelle. If there are chargebacks then there needs to be a dispute resolution system and higher fees to compensate. These are authorized payments, banks are already obligated to reimburse all unauthorized payments.

Yep, people are about to learn that those credit card fees actually buy you something.

Well several years ago I was a merchant, and every time I was victim of a fraud the Credit Card companies took their money from my payments, so those fee's did not cover the fraud at all. Not only was I out the product, I was also out the Money, and fee's a double whammy.

So I 100% disagree that the " credit card fees actually buy you something" because all they do it push the liability on to the merchant.

Visa and Mastercard is not covering the costs of fraud

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#23

Post by asu_thomas »

arcticbull wrote: post #15
spandextwins wrote: post #11

Earlier quoted context omitted.

Credit card fees, like insurance rates, are staggeringly high to cover all the crime and fraud. Just hope someday those companies don’t have to have their own law enforcement teams to go after the criminals who cause all that fraud and crime.

Most of the fee goes back to customers in the form of cash back and loyalty points. The networks only get some 0.3% ish, the rest goes to the issuing banks. That's why you can get a no-annual-fee 2% cash back card like the Citi Double Cash. Debit cards that fall under the Durbin amendment to the Dodd-Frank act only charge 0.05% + $0.21

[dead]

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#24

Post by asu_thomas »

arcticbull wrote: post #14
stephenhuey wrote: post #13

Earlier quoted context omitted.

I see other comments here saying it's intended to be digital cash, but as a programmer it makes no sense that we Zelle users cannot find out the identify and ultimate destination on the other side of the funds transfer - it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. About 4 years ago, I got scammed when I sent a payment to a local preschool and later found ou…

> ... it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. FedNow is here and live.

[dead]

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#25

Post by taway32r41 »

stephenhuey wrote: post #13
costco wrote: post #6

Earlier quoted context omitted.

There is no way to do what the senators want without undermining the entire point of Zelle. If there are chargebacks then there needs to be a dispute resolution system and higher fees to compensate. These are authorized payments, banks are already obligated to reimburse all unauthorized payments.

I see other comments here saying it's intended to be digital cash, but as a programmer it makes no sense that we Zelle users cannot find out the identify and ultimate destination on the other side of the funds transfer - it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. About 4 years ago, I got scammed when I sent a payment to a local preschool and later found ou…

I don't think that one can't add security and verification, etc. I think the issue is those things are not free and it is supposed that adding them would just transform Zelle into something more akin to a credit card, which we already have.

In your example it seems you did actually send it to the school. The problem was an additional party also had access to school accounts, even if old. To me that's equivalent to a former employee having an illicit copy of keys to the till and stealing cash from it in the off hours. Police would probably treat that crime similarly.

At the end of the day the police have to prioritize their resources too. Technically they could "do" things. But is it worth the cost? When it comes to petty crimes it seems mostly the answer is no, and I have to agree. Even when I had my own phone pick pocketed. It sucks but life goes on.

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#26

Post by stephenhuey »

arcticbull wrote: post #14
stephenhuey wrote: post #13

Earlier quoted context omitted.

I see other comments here saying it's intended to be digital cash, but as a programmer it makes no sense that we Zelle users cannot find out the identify and ultimate destination on the other side of the funds transfer - it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. About 4 years ago, I got scammed when I sent a payment to a local preschool and later found ou…

> ... it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. FedNow is here and live.

FedNow is live, but not quite "here" since I can't personally send money to my neighbor with it yet. I'll be interested to see how the implementation looks to an end user such as myself, and how I can verify the identity/destination of the recipient. A little over a month ago, the Los Angeles Times said JPMorgan Chase would offer it soon. The JPMC website has a page about how people can implement it through their platform. However, when I log into my Chase account and search for fednow, this is what I get:

You asked: "fednow"

We're sorry but we need more details to give you a complete and accurate answer. Can you please rephrase your question?

https://www.jpmorgan.com/payments/solutions/fednow

https://www.latimes.com/business/story/2023-07-29/heres-now-...

https://www.frbservices.org/financial-services/fednow

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#27

Post by toss1 »

costco wrote: post #6
godzillabrennus wrote: post #5

Earlier quoted context omitted.

That’s an elitist world view / statement. More than half of Americans have less than $500 in savings: https://www.gobankingrates.com/saving-money/savings-advice/n...

There is no way to do what the senators want without undermining the entire point of Zelle. If there are chargebacks then there needs to be a dispute resolution system and higher fees to compensate. These are authorized payments, banks are already obligated to reimburse all unauthorized payments.

>>Higher fees to compensate

Really?

My bank was charging me $40/month just to have the service active to use it for occasional payments. I did not even realize that using it once "subscribed" me to the service, and fortunately was able to have months of bogus fees reversed.

Plus, it was not even actually all that convenient.

Just skim the report. It id damning.

One thing I learned a long time ago:

Never mistake a bank (or banker) for a friend, no matter how much they try to market their "friendliness". They may sometimes be necessary or even useful, but they are never your friend when it comes down to it.

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#28

Post by stephenhuey »

taway32r41 wrote: post #25
stephenhuey wrote: post #13

Earlier quoted context omitted.

I see other comments here saying it's intended to be digital cash, but as a programmer it makes no sense that we Zelle users cannot find out the identify and ultimate destination on the other side of the funds transfer - it's also annoying that the USA doesn't have a simple bank transfer system like many other countries do. About 4 years ago, I got scammed when I sent a payment to a local preschool and later found ou…

I don't think that one can't add security and verification, etc. I think the issue is those things are not free and it is supposed that adding them would just transform Zelle into something more akin to a credit card, which we already have. In your example it seems you did actually send it to the school. The problem was an additional party also had access to school accounts, even if old. To me that's equivalent to a…

I agree with you. It was just fascinating to me how in hindsight I couldn't access the full digital trail of those funds and other people wouldn't just reveal it to me on account of privacy. As other people have pointed out, the courts would be needed, because even though I showed them evidence with some screenshots, etc, I suppose I could have fabricated those to cause trouble for someone.

Re: Consumers defrauded on Zelle are left high and dry by the banks that created it [pdf]

#30

Post by mindslight »

costco wrote: post #6
godzillabrennus wrote: post #5

Earlier quoted context omitted.

That’s an elitist world view / statement. More than half of Americans have less than $500 in savings: https://www.gobankingrates.com/saving-money/savings-advice/n...

There is no way to do what the senators want without undermining the entire point of Zelle. If there are chargebacks then there needs to be a dispute resolution system and higher fees to compensate. These are authorized payments, banks are already obligated to reimburse all unauthorized payments.

The entire foundation of the US banking system is directly opposed to the claimed point of Zelle. Which is why any business that wants to convert the very "soft" money of the banking system into anything harder (eg cryptocurrency) inevitably needs to plan for and eat losses.

I'm somewhat sympathetic with your point as applied to fraudulently induced yet properly authorized payments. But it's utterly untenable when talking about unauthorized payments from someone else gaining access to a bank web interface and things like that - the security posture of banks and the security properties they expose to customers would have to change drastically to change that. And frankly assuming a system already has to deal with the second kind, dealing with the first carries basically the same burden.

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