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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]

#41

Post by sidewndr46 »

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 not a service for end users. It's a service for banks.

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

#42

Post by CalChris »

isanengineer wrote: post #36

It's not just fraud you need to worry about. Here's a horror story for you. A few years back I was moving to a city for graduate school and needed to rent an apartment. A friend of mine toured the place and when we decided to rent the landlord asked if we could send him the security deposit using Zelle. I sent the deposit using his contact information, but he never received it. I spent three weeks being passed back a…

I use Zelle all the time but with people I know. In fact, I can't remember where my check book is. I use Apple Pay all the time and I use an actual credit card about once a month. I use cash at one place, my taco truck of choice. And for the record, I've never touched bitcoin.

I've used PayPal and Venmo but I don't see their utility now and prefer Apple Pay.

All of these modern tools have their benefits and risks. I got burned for $40 on Zelle for a bike part. It was a $40 lesson.

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

#43

Post by Arrath »

ceejayoz wrote: post #17
squeaky-clean wrote: post #10

Earlier quoted context omitted.

Looks like one was released around 2019, I didn't even know. I can't find any specific dates mentioned or any press releases. Things around 2017 mention a Zelle app coming in the future, by 2019 articles are mentioning the Zelle app.

The app just tells me my bank has Zelle and I should use it instead.

Same here. Not that I am a fan of just throwing money into the aether and hoping it gets to the right destination in any case.

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

#44

Post by m_0x »

akira2501 wrote: post #33
NovemberWhiskey wrote: post #29

"Consumers defrauded with cash are left high and dry by the Federal Reserve Bank that created it".

Did the Federal Reserve promise me that cash was always "safe, fast and convenient?" Are they getting a cut of every dollar I spend?

They get a cut after every dollar created.

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

#45

Post by ben0x539 »

isanengineer wrote: post #36

It's not just fraud you need to worry about. Here's a horror story for you. A few years back I was moving to a city for graduate school and needed to rent an apartment. A friend of mine toured the place and when we decided to rent the landlord asked if we could send him the security deposit using Zelle. I sent the deposit using his contact information, but he never received it. I spent three weeks being passed back a…

> I also found that Zelle is basically just a front-end for the existing ACH Direct Deposit system. [...] > > tl;dr do not ever use Zelle.

I can't figure out how to do ACH transfers to friends with my credit union, and I've been told Zelle is the solution for that. I guess I should stick to Venmo?

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

#46

Post by taway32r41 »

phpisthebest wrote: post #22
wmf wrote: post #8

Earlier quoted context omitted.

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 M…

I think the general idea is credit cards take care of the card holders. They've certainly always have taken care of me. And merchants are supposed to take care of themselves by raising prices. The system is certainly not perfect but seems to mostly work.

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

#47

Post by CaliforniaKarl »

fsckboy wrote: post #3
fortran77 wrote: post #2

For one thing, they should make NEVER send any emails or SMS related to Zelle, and the app should say every time it starts "Zelle NEVER sends you an email or text message. Do everything from inside the app." Theat would be a good start.

> NEVER send any emails or SMS related to Zelle, and the app should say every time it starts "Zelle NEVER sends you an email or text message. Do everything from inside the app." is Zelle ever its own app? I only use Zelle from my banks' apps, and banks use TFA with text messages all the time, including from the website, calls to support, and the bank app running on the phone. I'm not saying that TFA texts to your pho…

Zelle does have their own app, and I have used it before.

The app is for folks using a domestic United States bank that isn't connected to Zelle. During registration, the Zelle app prompts you for your bank name, your mobile phone number, and email address. Those are all checked: If your bank isn't listed as a Zelle-supporting bank, and your phone number & email aren't already linked in the Zelle system, then you can use the app.

You also need to have a Visa- or MasterCard-based debit card. You did not need to provide your PIN. Zelle uses the same rails as VenMo's Instance Bank Transfer[0] payout option, so Zelle is subject to the same limitations.

IIRC, all logins required either mobile number or email, password, and SMS-based two-factor. I think your login lasted for maybe a day. I used the app in the days before app-based two-factor was a thing, so I don't know if they still use SMS-based two-factor today.

Sending and receiving money worked as advertised. In particular, money received would show up in my bank account fairly quickly (within a few hours, IIRC).

I was not charged any fees—for deposits or withdrawals—for using the Zelle app.

[0]: https://help.venmo.com/hc/en-us/articles/115015844068-Instan...

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

#48

Post by lolinder »

NovemberWhiskey wrote: post #32
freejazz wrote: post #12

Earlier quoted context omitted.

I don't think you are getting the Senate report's point. It's titled "How Consumers Defrauded on Zelle are Left High and Dry by the Banks that Created It " When you say it would undermine the entire point of Zelle, I don't think that's the Senate's concern. I think the Senate's concern is that banks have created a money transfer system where they eschew their legal obligation to reimburse all unauthorized payments.

But a payment as part of a fraud is often an nauthorized payment. This is what people don't realize. An authorized payment is one that you agreed to make; if you didn't get what you expected in return, that doesn't make the payment unauthorized. Banks have no legal obligation to refund authorized payments, any more than they have obligations to refund people who took cash out of ATMs that they lost as part of a fraud…

The third bullet point on the first page says that the kind of fraud involved includes hacked accounts, which is the most classic type of unauthorized payment:

> Banks are not repaying customers who contest “unauthorized” Zelle payments – potentially violating federal law and CFPB rules. Zelle claims to have a “zero liability policy” for cases in which a bad actor gains access to a consumer’s Zelle account and uses it to make unauthorized payments, and the Electronic Fund Transfer Act (EFTA) and the Consumer Financial Protection Bureau’s (CFPB) “Regulation E” require that the banks repay customers when funds are illegally taken out of their account without authorization. But the data provided by the banks revealed that they reimbursed consumers for only 47% of the dollar amount of cases in which customers reported unauthorized payments on Zelle in 2021 and the first half of 2022.

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

#49

Post by mark_up »

akira2501 wrote: post #33
NovemberWhiskey wrote: post #29

"Consumers defrauded with cash are left high and dry by the Federal Reserve Bank that created it".

Did the Federal Reserve promise me that cash was always "safe, fast and convenient?" Are they getting a cut of every dollar I spend?

[dead]

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

#50

Post by [deleted] »

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.

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