JPMorgan Chase, Bank of America, and Wells Fargo have agreed to testify before the U.S. Senate regarding a major fraud incident involving the Zelle payment network.
According to Politico, citing sources, the hearing scheduled for March 23 will feature top executives responsible for bank settlement operations.
The Senate Permanent Subcommittee on Investigations will conduct the hearing, highlighting that customers of these major banks reported $2.02 billion in fraudulent transactions to Zelle in 2022.
Democratic Senator and committee chairman Richard Blumenthal criticized the banks for inadequate consumer protection.
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He stated, “They see this as just the cost of doing business. But it’s the cost to users, not themselves, because it’s the customers who are being fleeced. That’s why we’re calling on Zelle and the three big banks to step up.”
Blumenthal emphasized that banks are now “ready,” as criminals increasingly exploit advanced technology to deceive customers.
He explained, “Criminals are increasingly using personalized scams, employing AI for voice cloning, and extracting personal data from hacked sources to sell on the dark web, escalating the risks. The risks are growing and defenses must be strengthened. Zelle and the parent banks are aware of alarming new trends. No doubt. They’ve been warned. They track detailed information on the latest frauds but have failed to stop them. They’ve also failed to compensate their customers.”
Zelle, owned by JPMorgan Chase, Bank of America, and Wells Fargo among seven U.S. banks, processed transactions worth $80.6 billion last year, “with less than one-tenth of one percent reported as fraud.”
