Banks in Talks to Reimburse Zelle Customers Who Were Scammed
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Here's your money briefing for Monday, December 5th. I'm J.R. Whelan for The Wall Street Journal. It seems like wherever there's money, scammers aren't that far behind. Well, their latest target is users of the Zelle payment system.
Someone impersonates a bank or someone impersonates something and tricks you into wiring money via Zelle to what you think is yourself. And it turns out to be they've used your number or your email and created a separate account.
The banks behind Zelle are now drawing up a plan to issue refunds to those who've been swindled. And it turns out scams like these are becoming more frequent on other payment systems, too. We'll talk to WSJ Banking reporter David Benoit about how banks are trying to plug up the holes that scammers are exploiting in steps you can take to protect yourself from fraud. That's after the break.
This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com.
What is the Zelle scam problem banks are discussing?
That's R-E-L-I-A-Q-U-E-S-T.com.
Scammers have been targeting users of the Zelle payment system, and now several big banks, including JPMorgan Chase and Wells Fargo, are working on a plan to reimburse people who've lost money to the fraudsters. WSJ's David Benoit joins us with more. Hey, David, thank you very much for being with us.
Of course. Thanks for having me.
So, David, how does Zelle work, and what's the relationship between Zelle and some of the big banks?
The big banks are the ones who created Zelle. It is a what we call peer-to-peer payment system. So if I want to send you $5, JR, I will send it via Zelle from my bank account to your bank account. It's one of these instantaneous competitors to the Venmos and the cash apps of the world. And the banks created it as an internal system because they saw Venmo was becoming really popular and they needed a way to compete.
All right. So the banks are zeroing in on scammers who've been swindling users. Do we know how much money has been lost to the fraudsters?
So that's a tricky question. It sort of depends on who you ask. And it's sort of at the center of a fight over Zelle. So the banks would say not a dollar number, but they'd say 99.9% of our transactions through Zelle are safe. There's no scam. There's no fraud. What we've been hearing, though, is the numbers of scams and frauds have been increasing as the number of transactions have been increasing. And Elizabeth Warren, the Massachusetts senator, has really focused in on Zelle as a problem. And she put out a report in October saying that she got data from the banks and that several of the banks gave her what she wanted and that we've seen about $250 million in fraud this year on Zelle. The banks sort of dispute how she's counting that.
But the numbers are growing and it's a problem. It's a question of how big of a problem.
So what are the banks doing about all this, you know, to try to stop or at least try to contain all this swindling going on?
There's one set of scams that they think they can target. And it's a scam in which someone impersonates a bank or someone impersonates something and tricks you into wiring money via Zelle to what you think is yourself.
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