Illustration of two smartphones sitting on a yellow background with red tape across them that reads “DANGER”
Illustration by Amelia Holowaty Krales / The Verge

The banks that participate in the Zelle payments app owned by JPMorgan Chase, Bank of America, and others have relented in their refusal to pay back victims of imposter scams. Reuters reported today that the repayments started on June 30th and were a response to lawmaker pressure on the Consumer Financial Protection Bureau (CFPB) to compel lenders to reimburse victims.

Banks leaned on the fact that federal law only required them to pay back fraud victims if they didn’t authorize criminal transactions, leaving people who were tricked into approving payments in a lurch. Reuters wrote that the institutions were worried that if they started paying people back, it would only encourage more imposter fraud. But the Federal Trade Commission said early this year that such scams were already reported more for all payment types than any other fraud category in 2022.

Banks were reportedly also concerned about encouraging fraud by eating the cost of transaction authorizations. But Early Warning Services (EWS) — the company that Zelle operates under — created a way for banks to “claw back funds from recipients’ accounts” to get the money back to their victims. As part of the new policies, EWS now requires banks to flag suspicious transfers, such as those tied to accounts that have no prior Zelle transactions.

Reuters quotes Ben Chance, head fraud risk officer of EWS, as saying the new approach is “well above existing legal and regulatory requirements” and that the company has regularly updated its “strong set of controls since the launch of the network” to keep up with evolving scams.

Without regulation that targets these and other fraudulent schemes, EWS’s policy is just that: a policy that’s subject to EWS’s whims. So far, Reuters writes, the CFPB is satisfied with the banks’ approach here. A Senate hearing next month will probably touch on fraud, Reuters writes.

If you’ve been tricked into sending money to a scammer through the Zelle app, you can fill out a form on its website to report the fraud. Select the “imposter” tab to provide information such as the name and email that the scammer used to receive the money and who they claimed to be. Zelle also recommends reporting the fraudster to the FBI Internet Crime Complaint Center.

Notably, that page doesn’t say anything about a refund, only that Zelle “will report the information you provide to the recipient’s bank or credit union to help prevent others from having the same experience.”