Fraud is thriving on Zelle. The banks say it’s not their problem.
Another Wells Fargo customer, Julia Gibson, lost $2,500 in a similar scam in October. After reporting the fraud to the bank, the bank gave him provisional credit for the lost money. But in January, the bank abruptly canceled the credit, sending its balance to zero and incurring overdraft fees. The bank had decided that the loss was not fraudulent.
“What was so frustrating about all of this was that the customer service rep I spoke to told me that so many people had experienced this,” Ms Gibson said.
In their appeals to Wells Fargo, Mr. Faunce and Ms. Gibson cited Consumer Affairs rules regarding fraudulent losses, but the bank repeatedly pushed them back.
“There are certain indicators that we look for in the investigation to let us know that there has indeed been fraud on the account,” Wells Fargo wrote to Faunce on Feb. 23. “During investigation, we were unable to find any of these indicators present and denied the claim.
After The Times contacted the bank, it refunded Ms Gibson.
“We are committed to complying with all regulations governing transactions,” said Jim Seitz, spokesman for the bank. “We are actively working to raise awareness of common scams to help prevent these heartbreaking incidents.” He declined to discuss specific customer cases.
Other fraud victims trying to get their money back from banks have had better luck citing the law.
Ken Page-Romer, a psychotherapist and author who lives in Long Beach, New York, had $19,500 withdrawn from his account in November after receiving spoofed text alerts and calls that appeared to be from Citigroup phone numbers. The bank initially denied its claims. At the request of her husband, Gregory, a financial adviser, Mr Page-Romer wrote the bank a letter citing Regulation E and sent copies to the police and banking regulators. Citi promptly returned their stolen money.