Banks on the payment app Zelle have begun refunding victims of imposter scams to address consumer protection concerns raised by U.S. lawmakers and the federal consumer watchdog, in a major policy change.
The 2,100 financial firms on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase (JPM.N) and Bank of America (BAC.N), began reversing transfers as of June 30 for customers duped into sending money to scammers claiming to be from a government agency, bank or existing service provider, said Early Warning Services (EWS), the banks’ company that owns Zelle.
That’s “well above existing legal and regulatory requirements,” Ben Chance, chief fraud risk officer at EWS, told Reuters.
Federal rules require banks to reimburse customers for payments made without their authorization, such as by hackers, but not when customers themselves make the transfer.
While Zelle disclosed Aug. 30 that it had introduced a new reimbursement benefit for “specific scam types,” it has not previously provided details on its new imposter scam refund policy due to worries doing so might encourage criminals to make false scam claims, a spokesperson said.
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