Statement: Senate report finds consumers victimized by fraud left ‘high and dry’ by owners of Zelle app

Americans having problems with payments app owned by major banks, despite ‘zero liability’ claim 

WASHINGTON — Sen. Elizabeth Warren (MA) released a report Monday stating that the person-to-person (P2P) app Zelle is “facilitating fraud,” based on “internal data” from several of the big banks that own it. PIRG has been warning consumers of the issues surrounding Zelle and other payment apps since these apps started gaining popularity.

See 2021 report, “Virtual wallets, real complaints.”

In response, Ed Mierzwinski, the senior director of PIRG’s Federal Consumer Program, released the following statement

“Zelle is owned by a consortium of the nation’s largest banks. It has grown dramatically, now ‘processing more money than Venmo (owned by Paypal) and Cash App (owned by Block, nee Square) combined,’ according to Senator Warren’s report. Its not-so-dirty-secret is that it only compensates some victims of fraud but claims no responsibility to reimburse account holders ‘induced’ into authorizing the fraud.

“The nation’s largest banks shouldn’t advise their customers to use a product that is unsafe due to what Senator Warren’s report calls rampant and increasing fraud and theft — and then skirt responsibility for reimbursements. That reprehensible conduct —  hiding behind a claimed legal distinction between a fraud and a scam — might be expected from a fintech, but we expect better from an established bank. While we support regulatory clarification from the CFPB, we cannot condone banks promoting an unsafe product without a warranty.”