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New York
CNN Business
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Zelle, the popular payment app, is under fire for how it handles (or rather, doesn’t handle) fraud and scams that have exploded on the platform in recent years.
The New York Times called Zelle out in two reports earlier this year. That grabbed the attention of US senators, who pressed the CEOs of the nation’s large banks that own the platform in hearings last month and began an investigation into the service.
Here’s the deal: On Monday, Senator Elizabeth Warren’s office said its investigation into Zelle showed that fraud and theft are not only rampant but getting worse. And once people report fraudulent transactions, banks are reimbursing only a small fraction of the swindled customers.
“Big banks own and profit from Zelle but are failing to make their customers whole for both authorized and unauthorized fraudulent activity on the platform, despite their claims that it is safe,” Warren’s office wrote.
Key things to know:
- Zelle (rhymes with “tell”) was created in 2017 as the banking industry’s answer to Venmo and Cash App.
- The fintech companies behind those apps were doing what big banks had failed to do for decades —…
