Wells Fargo has disclosed that U.S. authorities are investigating how complaints related to the P2P payments service Zelle are handled. In an SEC filing, Wells Fargo stated, “Government authorities have been conducting formal or informal inquiries or investigations regarding the handling of customer disputes related to fund transfers made through the Zelle Network.”
JP Morgan made a similar disclosure in an SEC filing back in February, and it’s important to note that neither bank has been accused of any wrongdoing.
Zelle, which is operated by Early Warning Services—owned by seven major U.S. banks—was launched in 2017 and quickly gained popularity, handling $629 billion in transactions in 2022, more than double that of its closest competitor, Venmo.
However, the service has also faced criticism for “opening the door to fraud and scams on a tremendous scale,” as highlighted in a letter from Senate Democrats to various regulatory bodies, including the Federal Reserve Board and the FDIC. Senators, including Elizabeth Warren, urged regulators to closely review the customer reimbursement and anti-money laundering (AML) practices of banks involved in the Zelle network.