Zelle has begun refunding customers who fell victim to scams, although it seems the company’s actions are not entirely voluntary.
According to Reuters, Zelle originally pushed back against calls for it to issue refunds for scams, since federal law only requires financial institutions to refund money lost in unauthorized transactions. With a scam, however, the customer is ultimately tricked into transferring the money themselves.
The outlet reports that Zelle was under pressure from lawmakers to address the growing issue, resulting in the company changing its policy:
The new policy marks a major shift from last year when bankers, including JPMorgan CEO Jamie Dimon, told lawmakers worried about rising scams that it was unreasonable to require banks to refund transfers that customers were tricked into approving.
“We have had a strong set of controls since the launch of the network, and as part of our journey we have continued to evolve those controls… to keep pace with what we see is going on in the marketplace,” said Ben Chance, chief fraud risk officer at Early Warning Services (EWS).
“Zelle’s platform changes are long overdue,” said Senator Elizabeth Warren in a statement to Reuters. “The CFPB is standing with consumers, and I urge the agency to keep the pressure on Zelle to protect consumers from bad actors.”