Chase Bank is updating a policy that would block Zelle transactions through social media while making an effort to cut down on scam transactions, Gizmodo reports.
The adjusted user policy is a result of the financial institution’s increased focus on transactions related to online purchases made through social media, whether it’s from an online marketplace or a trade connection on Reddit.
Starting March 23, if the Zelle recipient is “identified as originating from contact through social media,” Chase will decide whether to decline or block the payment from being completed.
Chase has faced a number of fraud-related claims due to social media trans
actions, claiming that 50% of all fraud claims filed by the company’s Zelle customers originated on social media. NatWest Bank found that social media marketplace scams are expanding at a rapid pace. Sixty percent of users between the ages of 18 and 24 have either experienced personal financial loss from online scams or know a victim.The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Chase and competing institutions, Bank of America and Wells Fargo, accusing the companies, along with Zelle, of failing “to protect consumers from widespread fraud,” according to The Verge.
“Zelle is designed for sending money to others you know and trust, not for buying things on social media,” said Chase spokesperson Emma Eatman. “We’ve updated the language in our Terms and Conditions to help our customers protect themselves from scams that overwhelmingly originate from contact through social media platforms.”
Awareness over scam
alerts has become heightened as agencies like CFPB are at risk of losing website information, social media channels, and employees given the sweeping cuts from the Trump administration and the Department of Government Efficiency, led by tech billionaire Elon Musk.As Zelle has a “no refund” option, the company doesn’t offer purchase protection, meaning there is no way of getting your money due to a scam.
“Banks are working to stop scams where they originate, helping to prevent criminals from stealing money from
hardworking consumers,” Zelle spokesperson Jane Khodos said in response to Chase’s policy change. She added that fighting scams needs a “multilayered approach,” alluding that more than one entity should step up.RELATED CONTENT: Chase Takes Nationwide Action To Expand Credit Access for Small Businesses Through Special Purpose Credit Program in Historically Underserved Areas