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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]

#101

Post by hot_gril »

soneil wrote: post #94
randyrand wrote: post #76

Earlier quoted context omitted.

TIL! Tricky.

I assume everyone's familiar with the overpayment scam - it's probably the second most common cheque scam after simply passing bad cheques in the first place. You're accidentally paid too much, and are asked to return the remainder, or pass it on to someone else. Then the original cheque bounces and you're out product plus the remainder you passed along. This version relies on banks being required to make "funds avai…

I've heard of that scam, and there are variants where you're not "undoing" a transaction but sending another one in some way. I think it needs to be made clear to customers that transactions are never final.

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

#102

Post by jdmichal »

xboxnolifes wrote: post #86
cuteboy19 wrote: post #80

I agree that at some point people need to take some responsibility for being scammed. However, it seems that Zelle is engineered in the perfect way to help scammers. It is as though a committee of engineers and consultants sat together and said "How do we create the perfect vehicle for as many different types of scams as possible?" - Maybe! instant settlement - No standardized audit trail - No way to know who's reall…

- No standardized audit trail - No way to know who's really on the other side I think these 2 are the biggest ones. You put in someone's phone number / email, and you get maybe an associated name as reassurance. How do I know it's actually associated with an account the person I'm trying to pay has access to?

Ideally you know that because banks have KYC (Know Your Customer). And Zelle accounts must be populated by a bank. Individuals cannot just create a Zelle account. They must open an account with a bank -- and thereby undergo KYC -- who then creates their Zelle account.

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

#103

Post by steelframe »

constantly wrote: post #69
steelframe wrote: post #60

For anyone extolling the virtues of credit cards as the ultimate payer-friendly solution, my "exhibit A" is a vendor who charged my card and then put a freeze on actually shipping the product. Then they tried calling me while my phone didn't have a signal. Then they sent me an email saying their "verification" department couldn't reach me and to let them know when they can call. I replied telling them when they could…

This is a really good story to highlight how good credit cards are for this situation. It’s totally reasonable for a vendor to freeze shipping via credit card purchase until they’ve received confirmation they will be paid. Basically modern escrow. Sorry you seem to have been caught up in a rare edge case, I’ve been in the same situation, but am super happy that the system makes 99% of payments totally frictionless un…

> It’s totally reasonable for a vendor to freeze shipping via credit card purchase until they’ve received confirmation they will be paid.

Exactly, but I come to the stellar opposite conclusion than you do in this scenario. I would much rather have used a payment mechanism with this vendor that immediately and finally transferred the funds so that I get my item more quickly without playing 3 days of phone tag. BTW, this is a large and established vendor that I trust. You have likely ordered something from them in the past.

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

#104

Post by steelframe »

stu2b50 wrote: post #66
steelframe wrote: post #60

For anyone extolling the virtues of credit cards as the ultimate payer-friendly solution, my "exhibit A" is a vendor who charged my card and then put a freeze on actually shipping the product. Then they tried calling me while my phone didn't have a signal. Then they sent me an email saying their "verification" department couldn't reach me and to let them know when they can call. I replied telling them when they could…

What part of that is the fault of using a credit card? I'm extra confused since Amazon came into this, where you distinctly are able to use credit cards? With a credit card, you have the fallback of chargebacking. That's the benefit. You haven't gotten to that stage, although you certainly could have escalated to there by now.

> What part of that is the fault of using a credit card? I'm extra confused since Amazon came into this, where you distinctly are able to use credit cards?

Amazon, to my knowledge, will not charge you and then throw you into a "pending verification" quagmire.

But I would imagine most vendors don't want you ordering from Amazon. My point is that when I make an effort to order from another vendor when I could just order from Amazon, that vendor should introduce exactly zero friction to the process in order to be competitive.

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

#105

Post by stu2b50 »

steelframe wrote: post #104
stu2b50 wrote: post #66

Earlier quoted context omitted.

What part of that is the fault of using a credit card? I'm extra confused since Amazon came into this, where you distinctly are able to use credit cards? With a credit card, you have the fallback of chargebacking. That's the benefit. You haven't gotten to that stage, although you certainly could have escalated to there by now.

> What part of that is the fault of using a credit card? I'm extra confused since Amazon came into this, where you distinctly are able to use credit cards? Amazon, to my knowledge, will not charge you and then throw you into a "pending verification" quagmire. But I would imagine most vendors don't want you ordering from Amazon. My point is that when I make an effort to order from another vendor when I could just orde…

Sure, and that's the merchant's issue? There are no lack of merchants that take credit cards without any further measures like that. And because you used a credit card, you can, and probably should, just file a chargeback and be done with it.
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