WASHINGTON–Wells Fargo customers “are reporting fraud and scams on the bank’s Zelle platform at a rate that is nearly 2.5 times higher this year than it was in 2019, and the rate of reported fraud and scams this year is more than twice as high for Wells customers than it is for customers of other banks, according to a U.S. senator.
But the bank said the senator is incorrect.
The statement on Zelle fraud experienced by customers of Wells Fargo was issued by Sen. Elizabeth Warren (D-MA), who has been making an issue of fraud taking place on Zelle, the instant-payments system owned by seven of the nation’s biggest banks.
Warren recently grilled bank leaders during a Senate hearing last month and followed up what the New York Times called “a scathing report about the data” that a handful of banks sent her. Warren called fraud at Wells Fargo “profoundly troubling.”
In response to information provided to Warren by Wells Fargo, she issued the statement that the bank was seeing fraud rates on Zelle at double the rate of other institutions.
Bank Pushes Back
Wells Fargo disagrees.
“We don’t believe the numbers in a recent report are done on a comparable basis, and therefore the analysis is misleading and inaccurate,” said Amy Bonitatibus, a spokesperson for Wells Fargo, told the Times. “Based on the data we’ve seen, our Zelle fraud and scam rates are consistent with the industry.”
Zelle is run by Early Warning, a consortium based in Scottsdale, Ariz. that is owned by a group of banks: Bank of America, Capital One, JPMorgan Chase, PNC, Truist, U.S. Bank and Wells Fargo. Nearly 1,700 banks and credit unions use the network, and customers have sent $1.5 trillion through Zelle since it began operating in 2017, according to the Times.
Lawsuits Filed
But as CUToday.info has reported, consumers have been getting hit by sophisticated frauds and scams on the network, and some have filed class action suits, including against Navy Federal, alleging there is inadequate security.
Following Warren’s request for more data, three banks— Bank of America, PNC and U.S. Bank — collectively reported 135,000 Zelle fraud or scam claims this year, representing 0.03% of their Zelle transactions, Warren said in her letter to Wells Fargo, which reported a rate more than twice as high, Warren said.
The Wells Fargo spokesperson told the Times “99.94% of our customer transactions occurred without incident.”
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