Federal watchdog to tighten bank rules around money-transfer scams
The Consumer Financial Protection Bureau headquarters in Washington, D.C.
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A CFPB spokesperson declined to comment on the specifics of the report.
“Reports and consumer complaints of payments scams have risen sharply, and financial fraud can be devastating for victims,” the spokesperson said in an e-mailed statement. “The CFPB is working to prevent further harm, including by ensuring that financial institutions are living up to their investigation and error resolution obligations.”
A spokesperson for Early Warning Services, LLC, a group of seven banks that own Zelle, said the service had helped millions of consumers in their everyday lives, whether to pay rent, get money quickly when in need or satisfy debts to friends quickly.
“Protecting consumers is one of our top priorities,” the spokesperson said. “As a network, we constantly adapt consumer protection measures to address the dynamic and evolving nature of deceptive activities fraudsters employ.”
Scammers flock to P2P apps ‘like moths to a flame’
Matt Schulz, chief credit analyst at LendingTree, said there’s “no question” scammers on peer-to-peer payment services are generally “a big, big problem,” though.
“They’re attracted to these apps like moths to a flame because there’s just so much money flowing through them and because transfers happen so quickly,” he said in an e-mail.
It’s important for consumers to proceed with caution when using these apps because making a mistake may mean they’ll never see the money again, Schulz said.
“This isn’t like credit card fraud where the problem can often be handled with a quick phone call,” he added. “With P2P fraud, real money is often taken from a real account and oftentimes is gone for good. That’s a huge problem, especially in a time of rising inflation when so many Americans live on a tight budget.”