COLUMBUS, Ohio (WCMH) — For years, Zelle users have voiced concerns and frustrations to Better Call 4 about the lack of support they’ve received from the peer-to-peer payment platform — specifically when it comes to fraud. But things could soon be changing for some victims who lost money to scams.
Earlier this year, Better Call 4 told you the story of Jessica Birtcher, a Columbus woman who lost thousands of dollars to fraud on a popular payment app.
“I’d never used Zelle before so, I didn’t know what to do,” Birtcher said.
Initially, she called her bank. “I told them what had happened and they were like, ‘I’m sorry, but I think you’ve been scammed,'” Birtcher said.
Then, she called Better Call 4 for help, and to share her cautionary tale with other Zelle users. I reached out to Birtcher’s bank and Zelle, both telling me they were unable to investigate the matter further and would not refund Birtcher’s money.
Unfortunately, the unhappy ending to Birtcher’s story isn’t unique. Consumers have been losing money to payment app scams for years. According to the U.S. Senate Banking, Housing, and Urban Affairs Committee, Zelle users lost $440 million in 2021.
Consumer and finance expert Clark Howard said that’s likely because there are no rules on the books for payment platforms, meaning they aren’t liable if something goes wrong.
“When you deal with these payment apps, nobody anticipated them,” Howard said. “So, they don’t have any of the protections that you need to be safe with your money.”
But it appears Zelle is now taking steps to better protect its users. A spokesperson for Early Warning Services, LLC — the network operator of Zelle — issued this statement:
As the operator of Zelle, we continuously review and update our operating rules and technology practices to improve the consumer experience and address the dynamic nature of fraud and scams. As of June 30, 2023, our bank and credit union participants must reimburse consumers for qualifying imposter scams. The change ensures consistency across our network and goes beyond legal requirements.
The new standardized rules are applicable to all 2,100 participating bank brands on the Zelle Network. Our bank and credit union participants must reimburse consumers for qualifying imposter scams, including when a scammer impersonates a bank to trick a consumer into sending them money with Zelle.
Zelle has driven down fraud and scam rates because of our prevention and mitigation efforts implemented across our network of banks and credit unions. From 2022 to 2023, we’ve seen more than 99.9% of Zelle transactions reported without fraud or scams.
But whether Birtcher or any other scam victims will actually be reimbursed is up to each banking institution to determine what qualifies. In other words, if you were the victim of a fraudulent scheme through Zelle and lost money, you must report that loss to your bank in order to be reimbursed. Zelle also recommended reporting scams to them directly.