Chase Blocks Zelle Payments from Social Media Due to Scam Surge

Zelle Scams and Policy Changes

• Zelle and Chase Bank Response: JPMorgan Chase has blocked some Zelle payments due to a high rate of scams originating from social media contacts. The bank emphasizes that Zelle is intended for transfers to trusted individuals, not for online purchases or payments to strangers.

• CFPB Lawsuit Dismissed: The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against the lead banks behind Zelle, including Chase and Bank of America, as part of a broader downsizing of consumer rights enforcement by the White House.

• Scam Prevalence and Impact: Zelle scams have cost users hundreds of millions of dollars, with limited consumer protection initially provided. The app's operator and owner banks began reversing transfers for specific types of fraud in June 2023, but reimbursement policies are still restrictive.

• Chase’s New Terms: Chase will not allow Zelle payments that originate from social media contacts, effective next month. Users may be asked to provide additional information about the purpose and context of their payments to prevent fraudulent transactions.

• Consumer Advice: Users are advised to avoid making payments through peer-to-peer apps for goods and services and to use credit cards instead, which offer better consumer protections.