JPMorgan Chase, Bank of America and Wells Fargo have reportedly agreed to testify at a U.S. Senate hearing into hundreds of millions of dollars in fraud on the Zelle payment network.
Executives involved in the banks’ payments operations are expected to appear on July 23, Politico reported, citing sources authorized to speak anonymously about the plan.
The hearing will be held by the Permanent Subcommittee on Investigations, which says the banking giants’ customers reported $456 million in fraudulent transactions on Zelle in 2022 — with the banks refusing to refund $115 million in claims.
Democratic Senator and Chairman Richard Blumenthal says the banks are failing to do what they should do to protect their consumers.
“They’ve decided this is just the cost of doing business.
But it’s the cost to their consumers, not to them, because it’s the customer who runs out of money. That’s why we invited Zelle and the three largest banks to appear.”
Senator Blumenthal says banks are now “on notice” as scammers increasingly take advantage of technological advances to target customers.
“Criminals are increasingly using scams tailored to individuals with AI voice clones and personal data extracted from hacked data and sold on the dark web, increasing the risk. The risks are increasing, and so are the guarantees. Zelle and its owner banks are aware of the scary new trends. No question. They have been informed.
They keep detailed information about the latest scams, but fail to stop them. And they also fail to make their customers healthy.”
Zelle, owned by seven U.S. banks including Chase, BofA and Wells Fargo, says it processed $806 billion in transactions last year, with “less than one-tenth of one percent of transactions reported as fraud or scam.”
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