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Sen. Warren says the big banks that own Zelle aren't doing enough to protect users

MARY LOUISE KELLY, HOST:

Millions of people use the payment service Zelle to send and receive money. But Democratic Senator Elizabeth Warren says it is rife with fraud and theft. And she says big banks that own Zelle are not doing enough to protect users from scams. NPR's David Gura reports.

DAVID GURA, BYLINE: Banks market Zelle as a fast, safe and easy way to send and receive money. But Senator Elizabeth Warren takes issue with that. She spent six months investigating the service and criticized bank CEOs at a recent hearing.

(SOUNDBITE OF ARCHIVED RECORDING)

ELIZABETH WARREN: Zelle is fast. Zelle is easy. And they increase bank profit margins. But Zelle is not safe.

GURA: Warren found that in 2021, fraudulent transactions on Zelle totaled almost half a billion dollars. That's according to a new report she released. And she found banks had reimbursed customers less than half the money that was stolen through unauthorized payments on Zelle. While banks pay back customers for fraud, transactions they didn't authorize, there is no blanket policy for scams when bad actors convince Zelle users to transfer money. Bill Demchak, the CEO of PNC, addressed that distinction during his congressional testimony.

(SOUNDBITE OF ARCHIVED RECORDING)

BILL DEMCHAK: Scam is a different issue, and the Zelle Network and the owners are working to improve to get all customers' monies back.

GURA: At that recent hearing, Warren had a testy exchange with Jamie Dimon, the CEO of JPMorgan Chase, about data on fraud complaints she'd asked for but hadn't gotten.

(SOUNDBITE OF ARCHIVED RECORDING)

WARREN: It's very simple data.

JAMIE DIMON: I promise you. By the end of the day today, you'll get it.

WARREN: Terrific. All right. We'll get it by the end of the day once nobody's here to talk about it.

GURA: In her report, Warren notes that almost two weeks later, she still hasn't gotten that information. In a statement, the banking industry says 99.9% of Zelle transactions have not involved reports of fraud or scams. And they argue Zelle is being unfairly singled out, given there is also fraud on its rivals, including PayPal and Venmo, which are not run by banks. David Gura, NPR News, New York. Transcript provided by NPR, Copyright NPR.

David Gura
Based in New York, David Gura is a correspondent on NPR's business desk. His stories are broadcast on NPR's newsmagazines, All Things Considered, Morning Edition and Weekend Edition, and he regularly guest hosts 1A, a co-production of NPR and WAMU.

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SOMOS CONNECTICUT es una iniciativa de Connecticut Public, la emisora local de NPR y PBS del estado, que busca elevar nuestras historias latinas y expandir programación que alza y informa nuestras comunidades latinas locales. Visita CTPublic.org/latino para más reportajes y recursos. Para noticias, suscríbase a nuestro boletín informativo en ctpublic.org/newsletters.

The independent journalism and non-commercial programming you rely on every day is in danger.

If you’re reading this, you believe in trusted journalism and in learning without paywalls. You value access to educational content kids love and enriching cultural programming.

Now all of that is at risk.

Federal funding for public media is under threat and if it goes, the impact to our communities will be devastating.

Together, we can defend it. It’s time to protect what matters.

Your voice has protected public media before. Now, it’s needed again. Learn how you can protect the news and programming you depend on.