Despite years of declining to repay scam victims, Zelle eventually caves in

Legislators were disgusted to learn in the fall of 2022 that “the vast majority” of fooled Zelle consumers never received their money back, following years of criminals using this tactic to steal hundreds of millions of dollars from Zelle users by tricking individuals into authorizing fraudulent transfers. Regulators perceived Zelle as giving up its duty to monitor this progressively prevalent fraudulent behavior on its payments network.

However, Zelle has since had second thoughts and is making a greater effort to shield customers from fake schemes. Zelle revealed on Monday that the payouts app began refunding consumers who had been targeted by fraudsters at the end of June.

This was made practical, based on Reuters, by Early Warning Services (EWS), Zelle’s network operator, by an arrangement that absolves Zelle’s network of 2,100 financial organizations from having to reimburse transactions in which imposter scammers may have taken “possibly billions of dollars”.