Zelle Class Action Lawsuit
Zelle is an extremely useful tool for making fast electronic payments. Owned by the seven leading banks, and supported by a further 23 banks, the app makes it easy for bank customers to transfer money to friends and loved ones. Many people even use it to pay for goods and services – although this is not the purpose for which it was originally designed. Unfortunately, the app has prompted a fair amount of controversy recently, as many users have either fallen victim to one of several ongoing scams or have been hit with unexpected transaction fees. Dealing either with high bank fees or thousands of dollars worth of lost funds, consumers have complained to their banks, only to find them unhelpful and often unsympathetic. As a result, Zelle class action lawsuits are being filed against major financial institutions across the country.
In most of the fraud cases, banks have refused to refund their customers because they themselves (i.e., the customers) authorized the fraudulent transactions. In matters related to bank fees, consumers have faced an uphill battle trying to convince their banks that they should not have been charged for transactions, zelle overdraft fees, or no sufficient funds (NSF) fees. There is no blanket solution, and each case needs to be assessed on its own merits. Nevertheless, if you have either fallen victim to a Zelle scam, or been charged bank fees unfairly, you could be entitled to engage a class action lawsuit against Zelle lawyer and join the ongoing fight against major financial institutions.
What is the Zelle App?
Zelle is a payment method that allows you to send money easily, quickly and securely from your bank account to any recipient you choose. It does not work like a conventional electronic funds transfer (EFT), where you need the recipient’s bank account details to make the transfer. It is supposed to be even simpler and safer than that. All you need to send money to another person with Zelle – if your bank supports it – is the recipient’s email address or phone number. Assuming that both you and the recipient are enrolled in Zelle, it should only take a couple of minutes for the transfer to be completed. The reason the app is considered so safe is that it does not require users to share any sensitive financial information. This feature does indeed make it quite secure to send and receive money through the app. However, scammers are still able to find ways to take advantage of unsuspecting users. In addition, the app’s unclear policies with regard to transaction fees mean that users are often faced with unexpected charges.
Zelle Fraud Scam
While Zelle may be safe to use, it has recently been put to very effective use by scammers. It is uncertain whether a single syndicate is behind this scam, or if it is the work of several unrelated criminals. The latter seems to be the most likely, as the modus operandi is pretty consistent.
A user will receive a text message purporting to be a security alert from their bank (Bank of America appears to be the financial institution most often named in these messages). The text lists a series of transactions, including a Zelle payment for a fairly high amount, and asks the customer whether they had authorized the transactions. When the panic-stricken customer answers “No,” they soon receive a phone call from an individual claiming to be from the Bank of America – the caller ID even identifies them as such. This person then tells the customer that someone is attempting to defraud them and that they need to move their money out of the account to a safe location, using Zelle. The scammer tells the customer to open their Zelle app and transfer a certain amount to the details they provide, where the funds will be safe from whoever is targeting their account. Once the transfer is complete, the scammer hangs up and is never heard from again – and the money’s gone with no way to retrieve it.
When these customers call their banks in distress, having just paid sizeable sums – even their entire checking or savings balances in some cases – to the scammers, they do not get any help. As far as the banks are concerned, the customers performed and authorized these transactions themselves, and there is, therefore, nothing to be done. While this claim by the banks is somewhat understandable, federal law does, in fact, require that fraudulent transactions be refunded.
Bank fees on Zelle transfers / attempted transfers
Even among Zelle users who have not fallen victim to scammers, several cases have arisen where banks have charged unfairly for transactions carried out through the app. While Zelle itself is a free service, its terms of service state that users’ banks may still charge fees as they would with any other transactions. What happens then when people attempt to make Zelle transactions and their accounts do not have sufficient funds? Zelle Overdraft fees and Zelle NSF fees may be applied. These are often excessive and unexpected. These fees do not present a novel problem to bank customers. Even without Zelle, customers often deal with unfair overdraft or NSF fees. The use of Zelle just complicates the matter further.
Banks’ responsibility regarding fraudulent Zelle transactions and bank fees
The question is: what rights do customers have when they have been defrauded through Zelle? In turn, what responsibility do banks have to their defrauded customers? While it is true that the bank itself is not responsible for the customer’s losses, is it not fair for the latter to expect help from the financial institution? The major banks are always careful to affirm their responsibility to safeguard their customers’ accounts and funds. Their security measures do indeed go a long way toward providing the necessary protection, making it very difficult, if not impossible, for criminals to gain direct access to customers’ accounts. However, the situation appears much less clear when customers actually authorize the transactions in question, even when they are hoodwinked into doing so under false pretenses. The banks’ responses essentially amount to telling clients they should have been more careful, and that the institutions cannot be held responsible.
At face value, there appears to be some merit to this argument. However, federal law does actually require banks to reverse fraudulent transactions. When they are alerted to this fact by customers, their legal representatives or consumer watchdog organizations, they quickly reverse their position and pay the requested refunds. It thus seems evident that the banks should (a) offer better protection that prevents such scams from happening in the first place, and (b) reverse the transactions and/or refund their customers when fraudulent payments do occur.
As far as transaction fees are concerned, banks are obligated to inform their customers about what fees they will be charged – and when – when an account is first opened. They are entitled to charge overdraft and NSF fees, as long as their clients are aware that they may do so. They have a responsibility to ensure that their clients understand how much they will have to pay, and the circumstances that will lead to such charges being incurred. These circumstances may include returned checks or debit orders that could not be completed due to insufficient funds, and also Zelle transfers that could not be finalized for the same reasons. Although Zelle itself is a free service, the banks themselves still charge transaction fees when customers use the app. They have a responsibility to ensure that their customers understand this.
Tips to Protect Yourself from Zelle Fraudsters
Although consumers have a right to go to their banks for help when fraud occurs, they must also take care to protect themselves against the tactics scammers use to steal their money. All bank customers must be aware of their banks’ norms and practices. They must understand, for example, that a bank will never ask a customer to transfer funds between accounts in order to protect them against fraud. When they receive a communication requesting them to do so, they can therefore be assured that someone is trying to defraud them and refuse to comply. Banks offer ways to stop suspicious transactions when they arise. If you receive any communication from someone claiming to be from your bank, who then asks you to move any money from your account, you should end the call and contact your bank’s help center directly.
Do I qualify for the Zelle Class Action?
If you have fallen victim to a Zelle scam or have dealt with unfair charges for using the service, you may be eligible to join the Zelle Lawsuit. Each case is assessed on its own merits and circumstances, however. To find out if you do qualify, you should speak to a bank fraud lawyer or bank fee lawyer and explain the specifics of your case. The lawyer will then be able to tell you if you qualify for the zelle class action lawsuit.
Zelle scam/ bank fees FAQ’s
How can I get money back from Zelle if I was scammed?
Zelle is only a service that enables transactions from one bank account to another. It is not a financial institution in its own right. If you do fall victim to a scam via Zelle, you will have to contact your bank to get your money back. Federal law requires that they reverse the fraudulent transaction. If you are unable to get your bank to help you, you can take legal action, such as joining a Zelle class-action lawsuit.
Can you cancel a Zelle payment?
It is possible to cancel a Zelle payment, only if the recipient has not yet enrolled with the service. Otherwise, the transaction goes through instantly, making it impossible to cancel.
Who owns Zelle?
Zelle is run by a company called Early Warning Services, LLC, a financial services company, which, in turn, is owned by seven of America’s largest commercial banks: Bank of America, Truist, Capital One, JP Morgan Chase, PNC Bank, Wells Fargo and U.S. Bank.
Does Zelle or the Banks offer a protection program?
Zelle offers no fraud protection at all. It is recommended that the app be used only to make payments to friends, family and people you know relatively well. This is one way to prevent falling victim to scams. Banks do provide protection against fraud, ranging from encrypting online transactions to covering fraudulent transactions made on credit and debit cards. The exact protection provided differs from bank to bank.
About Shamis & Gentile
Shamis & Gentile provides outstanding legal services in Florida and New York. We distinguish ourselves because of our experience and resources, which we combine to handle any kind of case involving personal injury, personal injury protection, class actions/mass tort, and contract disputes. When you bring your case to Shamis & Gentile, you will always work with a seasoned attorney who has an excellent track record. We are progressive and trusted within the legal community and we are often called upon to settle cases that other law firms may not be able to handle on their own. If you believe that you might qualify to join a Zelle class-action lawsuit, either as a result of fraud or unfair bank fees.