Former presidential candidate and senator Elizabeth Warren (D-MA) is accusing the big banks of failing to protect their customers from scammers on the digital payment platform Zelle.
The top Democrat and self-styled champion of the middle class sharply criticized Wells Fargo as an egregious offender in a letter alleging its customers are being victimized at higher rates.
Warren raises alarm
Customers “are reporting fraud and scams on the bank’s Zelle platform at a rate that is nearly 2.5 times higher this year than it was in 2019, and that the rate of reported fraud and scams this year is more than twice as high for Wells customers than it is for customers of other banks,” Warren wrote.
The letter to Wells Fargo CEO Charles Scharf came after Warren issued a report claiming that customers on Zelle, which is owned by the top banks, were scammed out of at least $213.8 million in 2021 and the first half of 2022 and that the vast majority have not been refunded.
Banks that use Zelle are also repaying just under half of fraud victims, Warren claimed. Banks are required by law to refund fraud victims, meaning people who have money stolen without their authorization, but victims of confidence tricks have little recourse.
The banks have pushed back on Warren’s attacks, saying the rise in fraud on Zelle reflects the platform’s increasing popularity.
“Zelle usage has grown significantly since its launch, from 247 million transactions in 2017 to 1.8 billion in 2021, while the proportion of fraud and scams has steadily decreased,” Early Warning Services, which owns Zelle, said in a statement.
Bank pushes back on “misleading” claim
Meanwhile, Wells Fargo dismissed Warrens’ accusations as misleading.
“We don’t believe the numbers in a recent report are done on a comparable basis, and therefore the analysis is misleading and inaccurate,” Amy Bonitatibus, a spokeswoman for Wells Fargo, said. “Based on the data we’ve seen, our Zelle fraud and scam rates are consistent with the industry.”
Warren, who sits on the Senate Banking committee, is known for posing as a fighter for the middle class against exploitative corporate interests.
Republicans on the committee have raised concern about banks embracing the woke environmental, social and governance agenda, also known as ESG.
“I can’t help but observe that when banks do weigh-in on highly charged social and political issues, they seem to always come down on the liberal side,” ranking member Pat Toomey (Pa.) said recently.