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Zelle starts offering refunds for scammers after government pressure

According to Reuters, the banks of payment app Zelle have started refunding victims of scams by scammers to address consumer protection concerns raised by US lawmakers and the federal consumer watchdog. From the report: The 2,100 financial companies on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase and Bank of America, began reversing transfers from customers duped by sending money to scammers claiming to be from a government agency, a bank. or existing service provider, says Early Warning Services (EWS), the banking company that owns Zelle. That is “well above existing legal and regulatory requirements,” Ben Chance, chief fraud risk officer at EWS, told Reuters.

Federal rules require banks to reimburse customers for payments made without their permission, such as by hackers, but not when customers make the transfer themselves. Although Zelle announced on August 30 that it had introduced a new reimbursement benefit for “specific scams,” it has not previously provided details about its new refund policy for scam fraud due to concerns that it could encourage criminals to make false claims about fraud, a spokesperson said. said. The new policy marks a major shift from last year, when bankers including JPMorgan CEO Jamie Dimon told lawmakers, concerned about rising scams, that it was unreasonable to require banks to refund wire transfers sent by customers condoned deception.

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