Banks on the payment app Zelle have started refunding victims of imposter scams in response to concerns over consumer protection. This move comes after pressure from U.S. lawmakers and the federal consumer watchdog, with Zelle’s 2,100 financial firms – including JPMorgan Chase and Bank of America – beginning to reverse transfers as of June 30 for customers who fell victim to scammers posing as government officials, banks, or other service providers. According to Ben Chance, chief fraud risk officer at Early Warning Services (EWS), the company that owns Zelle, this effort goes beyond current legal and regulatory requirements.
While federal rules mandate that banks reimburse customers for unauthorized payments, Zelle’s new policy provides reimbursement for specific scam types, including imposter scams. This represents a significant shift from the previous stance of banks, which had argued against refunding transfers that customers were tricked into approving. However, concerns remain about the potential for the new policy to encourage false scam claims, as Zelle had previously not disclosed details of its imposter scam refund policy due to these worries. Despite these apprehensions, the move is a clear response to the growing threat of scams and fraudulent activities within the digital payment landscape, and aims to provide greater protection for consumers who have become victims of such schemes.
