Chase Bank has warned customers that it will block some Zelle payments starting March 23 following a major uptick in fraud and scam reports.
Zelle is a money transfer app in bank accounts and while convenient, the service has become a malicious tool on social media.
Chase said nearly half of fraud reports it received between June and December of last year were related to transactions that originated from social media.
‘If you are sending a Zelle payment from your Chase account that is identified as originating from contact through social media, we may, in our discretion delay, decline or block that payment,’ the bank shared in the announcement.
It added that an email, text or phone call will be issued to the customer regarding the purpose of the payment to determine ‘whether your payment has elevated fraud or scam risk, or is an illegal, ineligible or improper payment.’
Chase also warned users that it may take action if they ‘do not respond truthfully to questions’ about the purpose of payments when contacted.
Neither JPMorgan Chase or Zelle offer purchase protection for non-receipt, damage or ‘not as described’ claims related to the purchase of goods or services.
‘To help protect you from fraud and scams, the Zelle Service should be used for payments between friends, family, and others you trust and should not be used to pay for goods from recipients with whom you are not familiar,’ the new policy states.
According to Chase, nearly half of fraud reports it received between June and December of last year were related to transactions that originated from social media
Chase added that Zelle should never be used to ‘purchase of goods from retailers, merchants, or the like, including on or through social media or social media marketplaces or messaging apps.’
Scammers are posting fake items for sale online, asking for payments via Zelle and then disappearing with the money.
These criminals have also shared job postings that require payments for training materials, which also require unsuspecting victims to pay using the app.
And Chase reported that they are also impersonating the bank, convincing users to send money.
‘Neither we nor Zelle offer purchase protection for non-receipt, damage, or “not as described” claims related to the purchase of goods and/or services. See the section titled No Purchase Protection for more information,’ Chase’s new policy reads.
Zelle’s website states that victims who were knowingly involved in the transaction and authorized the payment to be sent may not be able to get their money back, even if they were tricked or persuaded into sending it.
But if a fraudster gained access to your bank account and sent a Zelle payment without your knowledge or permission, reporting the unauthorized activity to your bank should allow you to get your money bank, according to Zelle.
‘Contact your bank or credit union immediately if you feel you’ve been the victim of fraud or have been scammed,’ the app’s website states.
Last December, a watchdog sued JPMorgan Chase, Bank of America and Wells Fargo for allegedly failing to protect hundreds of thousands of customers who lost more than $870 million through Zelle payments since the app launched in 2017
‘In cases of unauthorized payments, consumers have legal rights and protections under the Electronic Funds Transfer Act.’
There are also ways you can protect your money from scammers and fraudsters lurking on social media, such as learning to spot the telltale signs of a digital payment app scam.
Cash flipping scams are one of the most common types. In these situations, victims get a direct message from someone on Instagram or another social media platform with an enticing offer.
It may say something like: ‘Send me $100 and I’ll use an app partnership to turn it into $500 in days.’
This is a scammer trying to get their hands on your money. In general, if a stranger reaches out to you through social media to offer a deal or investment opportunity that sounds too good to be true, it’s usually a scam, experts say.
Last December, a watchdog sued JPMorgan Chase, Bank of America and Wells Fargo for allegedly failing to protect hundreds of thousands of customers who lost more than $870 million through Zelle payments since the app launched in 2017.
The suit, filed by the Consumer Financial Protection Bureau (CFPB), claimed the banks failed to protect their customers from this rampant fraud.
The CFPB dropped the suit last week, but JPMorgan Chase plans to instate a new protection policy that should reduce the risk for its customers who use Zelle.
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