What’s happening
Criminals are using the banking payment service Zelle to scam unsuspecting consumers.
Why it matters
Created by major banks, Zelle provides easy electronic payments but poses serious security risks.
What’s next
Continuing fraud may hinder banks’ efforts to expand Zelle into retail payments.
Free payment service Zelle has become a mainstay for commercial banking customers — over 100 million people have access to the app via their bank accounts. While the service is simple and quick, its instant, irreversible transactions have made it an attractive target for scam artists.
On Friday, the Better Business Bureau reported a rise in Zelle scams on Facebook Marketplace. Stories of Zelle users losing thousands of dollars in money-transfer scams continue to make the news each week, and banks are facing multiple class-action lawsuits from aggrieved victims of fraud.
In an April 26 letter, Sens. Elizabeth Warren and Robert Menendez, both members of the Senate’s banking committee, questioned Zelle’s parent company, Early Warning Services, about “the extent to which…
