US Senators Elizabeth Warren and Robert Menendez have criticized the bank-backed P2P payments app Zelle following reports of extensive fraud and scams occurring on the platform.
In a letter addressed to Zelle operator Early Warning Systems, the senators expressed: "Both your company and the big banks who own and partner with the platform have abdicated responsibility for fraudulent transactions, leaving consumers with no way to get back their funds."
Zelle, introduced by Early Warning in 2017 and owned by seven major US banks, processed $490 billion in transactions last year—twice as much as its closest competitor, Venmo. However, a report from the New York Times referenced by the senators described the app as a "preferred tool for grifters."
In their correspondence, Warren and Menendez inquired about Early Warning’s methods for identifying scams, criteria for determining consumer refunds, and statistics on reported fraud cases and refunds over the past five years.
The senators stated: "The policies of your company and the banks that own and operate on it create a confusing and unfair environment for consumers, who are already facing ‘rampant’ and sophisticated threats from spammers on the platform."
Read the letter:
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