A recent report from the US Senate’s Permanent Subcommittee on Investigations reveals that JPMorgan Chase and Wells Fargo are reimbursing only a small fraction of customers who fall victim to scams on the instant payments network Zelle. In 2023, Chase reimbursed just 2% of reported scam cases, Wells Fargo 4%, and Bank of America a comparatively higher 24%.
Under US banking laws, a scam occurs when a customer is deceived into authorizing a payment they would not otherwise make. This is distinct from fraud, where transactions are unauthorized and happen without the customer’s consent.
For fraudulent transactions, the reimbursement rates have also declined. The subcommittee notes that the three banks reimbursed 50% of fraud claims in 2022, but this rate fell to 38% in 2023.
Melissa Felcher, Managing Director and Head of Commerce Enablement at JPMorgan Chase, emphasized the bank’s commitment to investigating claims and highlighted the need for new legislation targeting reimbursement for authorized transactions to combat criminal activities.
In 2023, customers of JPMorgan Chase, Wells Fargo, and Bank of America reported over $372 million in scams and fraud on Zelle. However, around $270 million, or about three-quarters of these claimed losses, were not reimbursed by the banks. Despite these issues, Zelle processed $803 billion in transactions last year, with 99.9% reportedly free from fraud or scam.
