Three weeks after releasing a report focused on frauds and scams on Zelle, U.S. Sen. Elizabeth Warren has sent a letter to the Consumer Financial Protection Bureau (CFPB) summarizing the findings and encouraging the agency to update and strengthen its regulation of that and other peer-to-peer (P2) payment platforms.
“As the CFPB considers whether to take action on this topic, the findings of my investigation reveal that the agency must strengthen consumer protections on peer-to-peer platforms like Zelle,” Warren said in a Thursday (Oct. 27) press release about the Wednesday (Oct. 26) letter.
“The rising volume of fraud and scams — combined with banks’ failure to make consumers whole in more than 90% of authorized scam cases and nearly 50% of unauthorized fraud cases — is a violation of banks’ responsibilities to their consumers and is not consistent with the goals of Regulation E,” Warren said.
In a statement emailed to PYMNTS Friday on behalf of Early Warning Services, the owner of Zelle, the company said that tens of millions of consumers safely use the platform and more than 99.9% of payments are sent with no report of fraud or scams.
“Any external analysis done is incomplete and does not reflect the efforts and data reported by more than 1,700 financial institutions on the Zelle Network,” the statement said. “Furthermore, Zelle and our financial institutions have spent millions on consumer protection, and we will continue to invest as our efforts have proven to help reduce fraud and scams.”
As PYMNTS reported Oct. 4, Warren’s report described Zelle as a haven for fraud and called for tougher consumer protection.
Read more: P2P Payment Fraud Under Microscope as Lawmakers Seek Regulatory Solution
The Massachusetts Democrat’s move ignited opposition from banks and other proponents of P2P payments technology, who contend that the platform is a safe conduit for people to pay one another quickly and conveniently.