The well-known payment app Zelle has come under fire for the way it handles—or rather, doesn't handle—the fraud and scams that have mushroomed on the platform in recent years.
The inquiry of Zelle, according to the office of Senator Elizabeth Warren, revealed that fraud and theft are not only pervasive but also getting worse.
Despite their assurances that the platform is secure, big banks "own and profit from Zelle but are failing to make their customers whole for both authorized and unauthorized fraudulent activity on the platform," according to a statement from Warren's office.
The largest peer-to-peer payment system in America right now is by far Zelle. According to Zelle, there were $490 billion worth of transactions last year, an increase of 59% from the year before.
According to the report from Warren's office, Zelle is the "preferred tool of fraudsters and other bad actors" because of its size and accessibility (it's integrated right into the participating banks' apps).
On Monday, Zelle avoided specifically addressing Warren's claims in an effort to minimize the report.
The CFPB may come under increased pressure to update its guidelines as a result of Warren's report on Zelle.
To think about how friends used to transfer money before payment apps was kind of crazy.