A plan to repay victims of peer-to-peer payment scams has angered America’s smallest banks.
According to industry associations representing the country’s community banks and credit unions, if required to repay consumers who have been victims of scams, these institutions may terminate relationships with fast payment providers like Zelle, the Wall Street Journal reported Monday (Dec. 12).
We revealed last month that the seven main banks that hold Zelle were working on a scheme to compensate clients who were duped into sending money, something Zelle claims happens extremely seldom.
“Community banks have limited flexibility or capacity to personalize the apps, including fraud warnings and notifications to end users, when using Zelle and other applications,” Kruse told the Journal. The suggested approach “could jeopardize their capacity to provide these services.”
Financial institutions who refuse to participate in the plan risk losing access to a rapidly developing system that has moved billions of transactions and $1.5 trillion over the last five years according to Zelle’s statistics.