Chase has informed its customers that it will begin blocking payments to social media contacts via the Zelle P2P network due to concerns about fraud.
Starting March 23, the bank will update its Zelle user agreement to help reduce fraudulent transactions associated with purchases made through social media platforms like Facebook Marketplace. Chase has noted that nearly 50% of reported scams originate from social media, emphasizing that Zelle is intended for payments to friends, family, and other trusted recipients, not for transactions with people encountered online.
The revised services agreement states that the service should not be used for purchasing goods from retailers or merchants, including through social media or messaging apps. As part of this update, if a Zelle transfer is deemed to originate from social media contact, Chase may block or decline the payment. Additionally, the bank may request further information regarding the payment’s purpose, the method of contact with the recipient, or any other details it considers necessary to assess potential fraud or illegitimate transactions.
Zelle enjoys widespread popularity, boasting over 150 million enrolled users who sent more than $1 trillion through the platform in the last year. However, the service has faced scrutiny regarding how effectively banks protect users from scams. This has led to a lawsuit filed by the Consumer Financial Protection Bureau against JPMorgan Chase, Bank of America, and Wells Fargo, alleging that these banks have allowed fraud to proliferate on the Zelle platform.