Zelle, a favorite tool for online criminals, *might* begin protecting users from scams soon. Victims who report they’ve been “robbed” by thieves on the service have long been denied dispute rights we take for granted with other kinds of electronic transactions. On Monday, banks leaked a plan to the Wall Street Journal that would reverse this position. According to the story, banks that give an account to a criminal and receive stolen funds would be forced to refund the victim’s bank, which would then refund the victim. This is great news. It would bring P2P payments out of the dark ages. It would let Zelle thrive the way zero-liability policies turbocharged the credit/debit card market. More important, it would force banks to invest much more time and money into spotting and stopping criminals, since they’d be on the hook for losses.
For now, it’s just a story in the Wall Street Journal — and The New York Times, which really deserves credit for dragging Sen. Elizabeth Warren and her hearing-shaming tactics into this fight. There’s always the chance this is a stalling tactic. The Consumer Financial Protection Bureau is currently weighing rules that would impose this kind of liability on Zelle-member banks, and it’s long been theorized that banking regulators are weighing a…
