2 Investigates

Congressional investigation finds 90% of Zelle fraud claims not refunded

FORSYTH COUNTY, Ga. — A congressional investigation found that 90% of the time customers of the money-sharing app Zelle file claims for fraud, they do not get any money refunded.

“On the caller ID, it said Bank of America, and they had called me multiple times consecutively in a five-minute period,” Forsyth County resident Paula Lay said.

The man on the phone warned Lay that her Zelle account had been hacked and money was stolen.

However, the caller was the real thief, looking to use her Zelle account to steal money.

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The caller ending up with over $8,000 that he convinced Lay to transfer out of her account.

All that time, she thought a Bank of America employee was helping her prevent fraud.

“(It was) very convincing that what we were doing was stopping the transactions and I’d be able to get my money back in a couple days,” Lay said.

Zelle is a money-sharing app created and owned by big banks.

Many banks sign you up for it automatically.

An investigative report by Massachusetts Sen. Elizabeth Warren’s office found growing numbers of Zelle fraud claims.

Overall, the report found four banks reported 192,878 cases of scams, involving over $213.8 million of payments in 2021 and the first half of 2022.

The report alleges that “big banks own and profit from Zelle, but are failing to make their customers whole for both authorized and unauthorized fraudulent activity on the platform.”


Channel 2 Consumer Investigator Justin Gray has been reporting on concerns with Zelle in a series of stories and investigations since 2019.

“They use the Zelle app, and they’re off to the races with your money,” Channel 2 Consumer Adviser Clark Howard told Gray in 2021.

“It is far more dangerous to use than the already dangerous Venmo or Cash App,” Howard said. “Zelle is married at the hip to your bank account, and if a criminal is able to tap into money in your account through Zelle, the money is gone forever because the banks have been able to stop any regulatory action, or laws being passed that would give consumers normal protection.”

Many of the people we have talked to over the past three years have not been able to recoup their stolen money.

The Senate investigation agreed with those findings.

Banking giants Wells Fargo and Bank of America did not provide their refund data to Senate investigators.

From the banks that did, only 10% of Zelle scam claims have been refunded.

The operator of Zelle, Early Warning Services LLC, told Channel 2 Action News in a statement:

“Tens of millions of consumers safely use Zelle every day with more than 99.9% of payments sent without any report of fraud or scams.”

Zelle also disputes the Senate report findings.

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According to the statement:

“Any external analysis done is incomplete and does not reflect the efforts and data reported by more than 1,700 financial institutions on the Zelle Network.”

Lay said she had never used Zelle and was signed up automatically by Bank of America.

She has not received any refund so far.

“It’s very upsetting, very upsetting,” Lay said.

Sen. Warren sent a follow-up letter to Zelle, since Zelle disputes her findings.

The letter demands all data on Zelle fraud and refunds.


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