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Broomfield woman loses nearly $2,000 through unauthorized Zelle transactions

Consumer Financial Protection Bureau plans to hold banks accountable, Wall Street Journal reports
Broomfield woman loses nearly $2,000 in scam involving Zelle
Posted at 6:30 PM, Aug 19, 2022

DENVER — Scammers have become so sophisticated in their schemes these days, they'd probably make great sales people if they were on the right side of the law.

But it wasn't a convincing pitch or an unexpected spam call Dena Mendoza, a self-employed Broomfield woman, received on June 30 that resulted in nearly $2,000 in losses. Instead, Mendoza says she noticed more than a dozen transactions from her Zelle account, a peer-to-peer money transferring service, which is linked to her Blue Federal Credit Union account.

"There were continuous withdrawals of $100 and $200 increments being taken out of my account," Mendoza said. "This has really put a crimp in my finances, and it's been really hard."

Mendoza says she's never offered up sensitive information like her Social Security number or passwords to anyone, nor has she been in a suspicious situation where that information would have been compromised.

"I didn't know where to turn, and I thought my banking institution would be there to support me," Mendoza said.

She says her credit union determined those transactions were authorized, leaving her shocked and confused.

"I feel victimized by them as well, especially the risk management department who inquired. And I felt very accused of being the culprit of this and then trying to get the money back," Mendoza said.

Denver7 reached out to Blue Federal Credit Union several times by email and phone since Wednesday, but has not received a response.

Credit card processing expert Rajil Vohra, a business head at Chargebacks911, points out that Zelle isn't backed by the same protections as credit and debit cards.

"The premise of [Zelle] was not commerce, so nobody thought much about protection programs," Vohra said. "So that's one of the reasons this is like a open-ended invitation for fraud."

In the meantime, Mendoza feels like the way her credit union handled the matter is disappointing, considering all the years she's been their customer.

"I'm not getting the answers I feel I'm rightfully deserved in an institution I've been involved with or banking at for 24 years," Mendoza said.

Frustrations like Mendoza's were highlighted by U.S. Senators Elizabeth Warren, Robert Menendez and Jack Reed, who, in April, sent a letter to the company that created Zelle, Early Warning Services, LLC, which is owned by seven of the largest banking institutions in America, including Wells Fargo, Bank of America, Truist, JP Morgan Chase, Capitol One, PNC Bank and U.S. Bank.

The letter states that nearly 18 million people have been impacted by scams involving money transfer apps like Zelle.

"Alarmingly, both your company and the big banks who both own and partner with the platform have abdicated responsibility for fraudulent transactions, leaving consumers with no way to get back their funds," the letter reads.

The letter also states, "Banks have chosen to let consumers suffer, blaming them for authorizing fraudulent transactions."

In the coming weeks, there may be some relief for consumers. According to a Wall Street Journal report, the Consumer Financial Protection Bureau plans to create stricter rules that would push banks to repay more customers and tighten rules around fraudulent money transfers seen with services like Zelle.

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