Every day more than a billion dollars moves through Zelle, a money payment app that is found embedded in nearly every bank account in this country. And scammers have taken notice of how easy Zelle makes it to send and receive money.Despite federal rules requiring banks to refund unauthorized transactions, one man turned to sister station WCVB for help when his bank kept passing the buck.In just seconds, nearly $3,000 disappeared last month — unauthorized — from Frank Campanale’s account at Bank of America.”I see in rapid succession these three withdrawals coming out of my bank account,” he said. “Bang, bang, bang, this happened to me.”At the time, Campanale had unwittingly given scammers remote access to his phone. They quickly used Zelle, a money transfer service built into his Bank of America app to steal from his account.Campanale says he tried to stop it. After each transfer, the bank sent a confirmation text. Screenshots from Frank’s text messages show he’s trying to type “no” while the scammers are typing “yes.” Unfortunately, they were too quick and successfully made off with $999, $998 and $899 — a total of $2,896. Campanale immediately called Bank of America and filed a report with Harwich Police but says the bank told him Zelle transfers are like cash: once the money is gone, it’s gone.Bank of America said it needed 45 days to investigate, then denied Campanale’s claim saying “we completed the Zelle transfer(s) according to the instructions you provided us, and therefore no error occurred.” In a second denial letter, the bank suggested that Campanale “contact the person he sent the funds to” — totally disregarding that he was scammed and the money stolen.”Just the experience of being victimized this way and then being powerless to do anything about it is just so infuriating,” Campanale said. “They know that has been used for scamming for a while now.” A 1978 federal regulation known as Regulation E requires banks to reimburse customers for unauthorized electronic transactions, as long as the customer provides timely notice. Last year, the Consumer Financial Protection Bureau determined that rule applies to payment apps like Zelle. But plenty of other customers say they’ve filed appeals with their banks and received the same vague denials.”It’s just not right,” said Sen. Elizabeth Warren (D, Massachusetts). She’s become an outspoken critic of the massive amount of fraud she says Zelle has enabled, thanks in part to banks building the platform directly into their apps. “The banks are the ones who put it in there. The banks are the ones who are profiting off it. And now the banks want to say when things go wrong, ‘Oh it wasn’t us. Talk to the hand?’ No,” she said. Warren sent a letter this spring raising a number of questions to Zelle’s parent company, Early Warning Services, LLC, which is co-owned by seven of the nation’s largest banks including Bank of America. In response, Sen. Warren says she learned $440 million was lost to fraud on Zelle last year. The company says that’s far less than one percent of its transactions, and it does require banks to refund customers for unauthorized transfers. But that doesn’t necessarily include cases where the customer is tricked into sending money, which some banks consider “authorized” transactions. Senator Warren says the banks’ response has not been good enough, since several of them own Zelle, they built it into their platforms and know fraud is rampant.”The banks are deeply wedded and involved in this, and I think that means the bank needs to make it good for their customers,” Sen. Warren said. Despite denying Frank’s claim twice, the day after WCVB contacted Bank of America, they reversed course and refunded his money — all of it — which a spokesperson says they were already considering doing.A spokesperson for Early Warning Services, LLC — Zelle’s parent company — says there’s no failsafe or waiting period on moving money because they believe sending money in minutes provides people with greater utility for their bank accounts.
Every day more than a billion dollars moves through Zelle, a money payment app that is found embedded in nearly every bank account in this country. And scammers have taken notice of how easy Zelle makes it to send and receive money.
Despite federal rules requiring banks to refund unauthorized transactions, one man turned to sister station WCVB for help when his bank kept passing the buck.
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In just seconds, nearly $3,000 disappeared last month — unauthorized — from Frank Campanale’s account at Bank of America.
“I see in rapid succession these three withdrawals coming out of my bank account,” he said. “Bang, bang, bang, this happened to me.”
At the time, Campanale had unwittingly given scammers remote access to his phone. They quickly used Zelle, a money transfer service built into his Bank of America app to steal from his account.
Campanale says he tried to stop it. After each transfer, the bank sent a confirmation text. Screenshots from Frank’s text messages show he’s trying to type “no” while the scammers are typing “yes.” Unfortunately, they were too quick and successfully made off with $999, $998 and $899 — a total of $2,896.
Campanale immediately called Bank of America and filed a report with Harwich Police but says the bank told him Zelle transfers are like cash: once the money is gone, it’s gone.
Bank of America said it needed 45 days to investigate, then denied Campanale’s claim saying “we completed the Zelle transfer(s) according to the instructions you provided us, and therefore no error occurred.” In a second denial letter, the bank suggested that Campanale “contact the person he sent the funds to” — totally disregarding that he was scammed and the money stolen.
“Just the experience of being victimized this way and then being powerless to do anything about it is just so infuriating,” Campanale said. “They know that [Zelle] has been used for scamming for a while now.”
A 1978 federal regulation known as Regulation E requires banks to reimburse customers for unauthorized electronic transactions, as long as the customer provides timely notice. Last year, the Consumer Financial Protection Bureau determined that rule applies to payment apps like Zelle. But plenty of other customers say they’ve filed appeals with their banks and received the same vague denials.
“It’s just not right,” said Sen. Elizabeth Warren (D, Massachusetts). She’s become an outspoken critic of the massive amount of fraud she says Zelle has enabled, thanks in part to banks building the platform directly into their apps.
“The banks are the ones who put it in there. The banks are the ones who are profiting off it. And now the banks want to say when things go wrong, ‘Oh it wasn’t us. Talk to the hand?’ No,” she said.
Warren sent a letter this spring raising a number of questions to Zelle’s parent company, Early Warning Services, LLC, which is co-owned by seven of the nation’s largest banks including Bank of America. In response, Sen. Warren says she learned $440 million was lost to fraud on Zelle last year. The company says that’s far less than one percent of its transactions, and it does require banks to refund customers for unauthorized transfers. But that doesn’t necessarily include cases where the customer is tricked into sending money, which some banks consider “authorized” transactions.
Senator Warren says the banks’ response has not been good enough, since several of them own Zelle, they built it into their platforms and know fraud is rampant.
“The banks are deeply wedded and involved in this, and I think that means the bank needs to make it good for their customers,” Sen. Warren said.
Despite denying Frank’s claim twice, the day after WCVB contacted Bank of America, they reversed course and refunded his money — all of it — which a spokesperson says they were already considering doing.
A spokesperson for Early Warning Services, LLC — Zelle’s parent company — says there’s no failsafe or waiting period on moving money because they believe sending money in minutes provides people with greater utility for their bank accounts.
