Increasingly prevalent online scams involving the widely used digital payments network Zelle have prompted U.S. consumer banking firm JPMorgan Chase Bank to defer, decline, or block Zelle payments determined to originate from social media contacts beginning Mar. 23, according to BleepingComputer.
Chase Bank customers sending Zelle payments may be sought to provide details, including payment purpose and means of contact with recipients, said the bank in an updated user policy. Such a decision comes after Zelle operator Early Warning Services and three of its owners JPMorgan Chase, Bank of America, and Wells Fargo were sued by the Consumer Financial Protection Bureau over Zelle's security gaps stemming from its accelerated release to compete with CashApp and Venmo. "The nation's largest banks felt threatened by competing payment apps, so they rushed to put out Zelle. By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves," noted CFPB Director Rohit Chopra.
