Financial Firms on Zelle Reverse Transfers to Address Consumer Protection Concerns Raised by U.S. Lawmakers and Federal Consumer Watchdog.

Financial firms on Zelle, a peer-to-peer network owned by seven banks including JPMorgan Chase and Bank of America, have implemented a major policy change to address consumer protection concerns raised by U.S. lawmakers and the federal consumer watchdog.

As of June 30, the more than 2,100 financial firms on Zelle have begun reversing transfers their customers made to scammers who impersonated officials from government agencies, banks or other service providers in so-called impostor scams. The reversal of transfers is a major shift from the banks’ previous stance, which was to resist calls to reimburse victims of these types of scams, arguing that federal rules only require them to issue refunds for money taken out of customers’ bank accounts by hackers, as opposed to fraudulent payments customers are duped into authorizing.

The new policy offers consumer protection services to customers who have been duped into sending money to scammers claiming to be from a government agency, bank or existing service provider. The reversal of transfers is being handled by Early Warning Services (EWS), the banks’ company that owns Zelle.

The policy change is a response to consumer protection concerns raised by U.S. lawmakers and the federal consumer watchdog. It is hoped that the reversal of transfers will help protect customers from falling victim to imposter scams. It is also hoped that the policy change will help to restore consumer confidence in the banking system.