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According to the New York Times, Zelle, is an up and coming peer to peer payment app used by eighteen banks in the United States with 70 more about to subscribe. According to the company, Zelle users transferred a staggering $75 billion in 2017. But with its success, the company is taking heat as consumers allege that it is not providing enough protection against fraudulent transactions.

Last June, Early Warning Services, LLC, based out of Scottsdale, Arizona, introduced Zelle. It is built directly into each bank’s mobile app, making the system easy to use for customers.  “Cash transfers within the network often take place within seconds, which is must faster than through its rival payment services” such as Venmo, Square Cash and Apple Pay. Although more convenient for users, these rapid transactions have made it more difficult for banks to stop fraudulent activity.

With banks unable to halt or reverse these transactions due to the quickness of transfers, the ability to stop a scam from happening is not as high as consumers would like.  Some of the banks that use Zelle only consider transactions fraudulent if the customer did not authorize them. When a customer knowingly sends money to someone, some banks may offer little to no protection. This can include sending money to another user that offers concert tickets that does not deliver, sending money to a user that has been hacked, or phishing attempts from scammers posing as the user’s bank. Zelle states on its website that: “Neither Zelle nor the participating financial institutions offer a protection program for any purchase or sale conducted using Zelle.” However, Zelle has indicated that it is working closely with all banks that subscribe to its service to contain and combat fraudulent transactions.

The Better Business Bureau does have a report on the parent company, Early Warning Services, LLC. Their business profile with the Better Business Bureau of the Pacific Southwest is currently on update.

The FTC offers the following tips when using peer-to-peer payment systems:

  • “Scammers try to get you to pay them in many ways—including by sending money online—so make sure you know who you’re sending money to. If you use the service to receive money from someone you don’t know personally—maybe as payment for tickets to a concert or a game, or for an item you’re selling—transfer the money to your bank account and make sure the money is there before you send any goods.
  • Peer-to-peer payment systems require access to your financial information, so check your account settings to see if you can enable additional security measures that aren’t on by default. Consider turning on multi-factor authentication, requiring a PIN, or using fingerprint recognition like Touch ID.
  • Some systems or apps might share information about your transactions on social media. Check social media permissions or settings—some may be set to share your information with everyone by default. Adjust your settings based on what you’re comfortable sharing.”


Sources: Zelle, PR Newswire, The New York Times, and Federal Trade Commission: United States Federal Trade Commission, – not subject to copyright protection. 17 U.S.C. 403.

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