JPMorgan Chase, Bank of America and Wells Fargo have reportedly agreed to testify at a US Senate hearing over hundreds of millions of dollars in fraud on the payments network Zelle.
Executives involved in the banks’ payment operations are expected to appear on July 23rd, reports Politico, citing sources who were allowed 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 reimburse $115 million in claims.
Democratic Senator and Chairman Richard Blumenthal says the banks are failing to do what they should to protect their consumers.
“They’ve made the decision that this is just the cost of doing business.
But it’s the cost to their consumers, not them, because it’s the customer who is out of pocket. That’s why we have invited Zelle and the three largest banks to appear.”
Senator Blumenthal says the banks are now “on notice” as scammers increasingly utilize advances in technology to target customers.
“Criminals are increasingly using scams tailored to individuals with AI voice cloning and personal details pulled from hacked data, sold on the dark web, and increasing the risk. The risks are growing, and so must the safeguards. Zelle and its owner banks are aware of the frightening new trends. No question. They have been put on notice.
They track detailed information about the latest scams, but they’re failing to stop them. And failing also to make their customers whole.”
Zelle, which is owned by seven US 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 scams.”
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