June 20, 2024

Fraud Analysis

Victim of Scams & Fraud- Zelle

Zelle is in the news everywhere and is becoming popular for mishandling scams and fraud. The popular payment app was caught in two reports this year. They were accused of reimbursing only a portion of the money to the customers who got swindled after fraudulent transactions.

Zelle was developed in 2017 as an answer to Cash App and Venmo. The fintech companies behind these apps have done things impossible for big banks for decades. Zelle made transferring money to friends quick and effortless. This led to big banks collaborating and developing Zelle, which came into great action only in 2020 after the pandemic when digital payments started taking the big picture.

Zelle is the most extensive payment system in the U.S. Its transactions were 490 billion dollars last year, nearly 59% greater than the previous year. Zelle became the preferred tool for fraudsters as it was huge and easily accessible. Once the money and the internet collided, scammers came into the scene. The accusations were that the banks did not repay 90% of the customers who were tricked while paying on Zelle.

Users of Zelle in 2021 scams lost nearly 440 million dollars. The problem arose here because banks are only responsible for reimbursing unauthorized transactions. Zelle did not address the allegations and started downplaying them, which became the flash news everywhere.

This case on Zelle shows how the internet could swindle people’s money in a jiffy. However, Zelle in a statement noted that out of the 10 million of its users, nearly 99.9% of the payments have been made without fraud or scam. The scams have steadily decreased with the increase in the number of users. The statement further stressed that Zelle is safe and should not therefore be held responsible for any fraudulent transaction.

To keep up with the latest developments in the world of fintech and for more fintech news, please visit https://worldfintechnews.com/.

 

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