After Today’s Hearing, Warren and Menendez Call Out Big Bank CEOs For Failure to Provide Promised Data on Consumers Defrauded by Zelle
Warren: “During this morning’s BHUA hearing, in response to our questions, you committed to sharing information about the rate and total number of fraud and scams on Zelle “by the end of the day.”
“This data is crucial for the American people to understand the scope of the problem and for regulators to best understand how to protect consumers”
Video of Hearing Exchange (Youtube)
Washington, D.C. – Today, U.S. Senator Elizabeth Warren (D-Mass.) and U.S. Senator Bob Menendez (D. - N.J.) wrote a letter to the CEOs of several of the nation’s largest banks, Wells Fargo, Bank of America, and JPMorgan, calling out their failure to provide data on the prevalence of fraud and scams on Zelle, despite their commitments to immediately doing so during today’s Senate Banking, Housing, and Urban Affairs Committee (BHUA) hearing. These banks all created, co-own, and help manage Zelle’s parent company – Early Warning Services, LLC. Despite multiple calls from Senators Warren and Menendez to provide information about the scope of fraud on the platform, they have yet again failed to do so.
Earlier today, Senator Warren noted that while each of the banks markets Zelle to its customers as “safe,” millions of dollars are fraudulently transacted on the platform annually. Several CEOs promised to provide Senator Warren with the data she requested by the end of the day. JP Morgan’s Jamie Dimon “deeply apologize(d)” for having failed to do so previously.
Senator Warren asked each CEO whether they would commit to refunding customers who report to their banks that they’ve been defrauded through Zelle. None of the CEOs were willing to make that commitment.
“With instant transfers and limited transparency, Zelle, a ‘favorite of fraudsters,’ has given bad actors an ideal weapon with which to defraud consumers. Nearly 18 million consumers were defrauded through scams involving digital wallets and peer-to-peer payment platforms in 2020. In turn, both your bank and EWS have abdicated responsibility for making consumers whole leaving them with little recourse,” wrote the Senators.
Over the past six months, Senators Warren, Menendez, and Reed have led oversight letters requesting information about fraudulent transactions on Zelle. In April, Senator Warren led a letter to Early Warning Services asking the company to disclose how many reports of fraud it had received from users since the beginning of 2018. Early Warning Services provided little data on the volume of fraudulent transactions occurring on Zelle. In July, Senators Warren, Menendez, and Reed led letters to each of the banks that own Zelle’s parent company requesting information about the Zelle scams and frauds its customers have reported to them. With the exception of Truist, the relevant banks testifying provided little to none of the information the lawmakers requested.
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