DENVER — A credit union member here who was defrauded as part of a scam on Zelle has been reimbursed following a local media report.
As CUToday.info has reported, the refund comes as numerous financial institutions have found themselves facing proposed class action lawsuits over fraud in Zelle’s person-to-person payments solution, including Navy Federal. Plaintiffs are arguing financial institutions have not properly informed account-holders that they will not be reimbursed for financial losses due to fraud on Zelle.
Approximately 18 million people were affected by scams involving money transfer apps like Zelle in 2020, according to a letter several U.S. senators sent to the company that created Zelle, Early Warning Services, LLC, which is owned by seven of the largest banking institutions in America, including Wells Fargo, Bank of America, Truist, JP Morgan Chase, Capitol One, PNC Bank and U.S. Bank, the new report noted.
Member is Featured
Now, a media report in Denver has featured Broomfield, Colo., resident Dena Mendoza, who has been reimbursed after a “long and emotional two months,” according to local Channel 7 news, which credited Blue FCU for talking about the issue.
Reporting on TheDenverChannel.com, the news outlet said that in June Mendoza lost nearly $2,000 via 10 unauthorized transactions through her Zelle account she has with Blue Federal Credit Union. Mendoza told Denver7 she had been struggling to get the funds back.
"They've made me have assurance and security back with the credit union itself and also with implementing extra securities for me," Mendoza told the news outlet.
As CUToday.info and Channel 7 reported the typical Zelle scam involves someone posing as a bank/credit union employee and telling a customer/member that fraudulent activity is happening with their account. The scammer captures information that allows them to compromise the account and remove funds.
But Mendoza told Denver7 that wasn't the case for her and has no idea how the scammer got her information and gained access to her Blue FCU account.
CU Responds
In an on-camera interview with Denver7—which the news outlet described as a “a rare move for a banking institution asked about scams involving Zelle and the consumer protections in place for their customers”—Bobby Matthis, VP-digital innovation, said 5%-10% of Blue FCU’s members have already activated their Zelle account.
"I will tell you, it's an incredibly high demand service," Matthis told Denver7, before adding, "While payment technologies advance, it also opens the door for fraudsters.”
Matthis said Blue FCU goes above and beyond to educate its members about account security by hosting seminars, emailing customers security tips, alerting them to different scams and working with them personally to fortify their accounts, according to Denver7.
A ‘Gray Area’
Denver7 said it asked Matthis if there is a lack of consumer protections for their customers in these situations.
"That's a gray area... it's too hard to put a blanket across it," Matthis told Denver7. "You have to take it case by case... I believe [BlueFCU] works very hard with our members to understand the circumstances around it, partner with them and do everything we can to help them recover those funds."
Matthis added that less than 1% of BlueFCU members receive any credit back after asking it to investigate suspicious activity on their Zelle app.
"If the root of the fraud, or the root that caused the fraud to occur to that person, happened outside of our influence, all we can do is to help support them and help them find the cause and where all that happens," Matthis was quoted as saying.
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