Apps like Venmo and Cash App got a major boost during the pandemic. But with new fintech comes new avenues for fraud, and scams on peer-to-peer platforms have caught the attention of federal lawmakers as well as the Consumer Financial Protection Bureau.
The Wall Street Journal reports that Wells Fargo, Bank of America and J.P. Morgan, among other banks, are beefing up security on Zelle and creating a system to reimburse customers who fall victim to scams.
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The news that scammed Zelle users could soon be reimbursed by the banks that own the platform comes as the industry faces calls for tighter regulation.
“I would say it’s timely,” said Sheridan Trent with the Strawhecker Group, adding that for the banks, volunteering a fix could help build consumer trust.
“You only have to kind of google it to see that it is becoming more and more known, there’s been more cases that are highly visible,” Trent said.
That is, cases of customers transferring money to people who aren’t who they say they are.