February 19th 2025.
According to a report from Gizmodo, Chase Bank is making some changes to their policies in an effort to reduce fraudulent transactions made through the popular money transfer service, Zelle. The updated user policy is a direct response to the bank's increased focus on transactions made through social media platforms, whether it be a purchase from an online marketplace or a trade made on Reddit.
Beginning on March 23rd, if a Zelle recipient is found to have been contacted through social media, Chase will have the option to decline or block the payment from going through. This decision comes after the bank has faced numerous claims of fraud related to social media transactions, with a staggering 50% of all fraud claims filed by Zelle customers being linked to social media. In addition, a study by NatWest Bank revealed that scams on social media marketplaces are on the rise, with 60% of users between the ages of 18 and 24 either personally experiencing financial loss or knowing someone who has.
The Consumer Financial Protection Bureau (CFPB) has also taken action against Chase, as well as other major banks like Bank of America and Wells Fargo, for failing to protect consumers from fraud. According to The Verge, the CFPB has filed a lawsuit against these companies, as well as Zelle, for their negligence in preventing fraud.
Emma Eatman, a spokesperson for Chase, emphasized that Zelle is intended for sending money to trusted individuals, not for making purchases on social media. In light of the rising number of scams originating from social media, the bank has updated its Terms and Conditions to help customers protect themselves.
The issue of scams has become even more pressing as government agencies, like the CFPB, face significant budget cuts under the Trump administration. This, coupled with the leadership of tech mogul Elon Musk in the Department of Government Efficiency, has put government websites, social media accounts, and employees at risk.
One of the major concerns with Zelle is its lack of a refund option, meaning that victims of scams have no way of getting their money back. In response to Chase's policy change, Zelle spokesperson Jane Khodos stated that banks are working to prevent scams at their source, and that a multi-faceted approach is necessary to combat the issue.
On a related note, Chase has recently taken action to expand credit access for small businesses in historically underserved areas through a special purpose credit program. This is just one of the ways the bank is working to support and protect its customers from financial harm.
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