The U.S. Senate is looking into the money-transferring application Zelle and three major banks amid concerns that they aren’t doing enough to help consumers from fraud.
The Senate’s Permanent Subcommittee on Investigations issued a report Tuesday saying three banks – Bank of America, JPMorgan Chase and Wells Fargo – only reimbursed 38 percent of customers who said they did did not approve a transfer from their account.
“That is no excuse for the repeated, relentless failure,” Sen. Richard Blumenthal, (D) Connecticut, said before flying to Washington, D.C., for the hearing.
Blumenthal, who chairs the committee, noted banks are required under federal law to reimburse consumers for unauthorized transfers.
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The report estimated that customers lost a total of $100 million from unauthorized transfers that were not reimbursed.
JPMorgan Chase said in a statement that banks “can’t top these crimes alone,” but did not respond to the report’s finding about not reimbursing customers.
“The full force of the country – government, law enforcement, banks, social media platforms, tech and telecom firms, and civic society – must work together to eradicate these criminal acts and bring justice to victims,” the company also said.
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Early Warning Services, the parent company of Zelle, said 99.95 percent of transactions are completed without a complaint of fraud or scam.
“Early Warning, the network operator of the Zelle Network, has provided financial empowerment for millions of Americans and has led the industry in scam reimbursement efforts,” the company also said. “We are committed to protecting consumers through highly effective fraud and scam countermeasures.”
Neither Bank of America nor Wells Fargo responded to a request for comment Tuesday. The three banks all own a share of Zelle.
Blumenthal said before the Tuesday evening hearing that he plans to propose tougher requirements that banks are required to pay customers back for unauthorized transfers.
He said one reason for the committee’s hearings – customers and consumer advocates testified in May – was to learn how to get regulators to act when banks violate their requirements.
Additionally, Blumenthal wants to require banks to reimburse customers who approve a transfer but later learn they are the victim of fraud.
According to the Senate report, the three banks only reimbursed customers in 12 percent of cases where they reported fraud.
