JPMorgan Chase, Bank of America, and Wells Fargo are set to testify at a forthcoming US Senate hearing regarding substantial fraud allegations involving the Zelle payments network, reportedly totaling hundreds of millions of dollars. According to Politico, sources familiar with the matter, who spoke on condition of anonymity, indicate that executives responsible for the banks’ payment operations will appear on July 23rd.

The hearing, to be conducted by the Permanent Subcommittee on Investigations, follows claims from customers of the banking giants, reporting fraudulent transactions amounting to $456 million on Zelle in 2022. Allegedly, the banks have declined $115 million in reimbursement claims. Democratic Senator and Chairman Richard Blumenthal criticized the banks, asserting they have failed in their obligation to safeguard consumers.

“They have adopted the view that such losses are simply a cost of conducting business. However, it’s the customers who bear this cost, not the banks themselves. This is why we have summoned Zelle and the three largest banks to testify,” Senator Blumenthal remarked.

Senator Blumenthal emphasized that banks are now under heightened scrutiny as criminals increasingly exploit technological advancements to target customers. “Scammers are utilizing sophisticated tactics such as AI voice cloning and leveraging personal information obtained from hacked data available on the dark web,” he warned. “The risks are escalating, necessitating stronger protective measures. Despite tracking detailed information on emerging scams, Zelle and its parent banks have not effectively thwarted these activities nor fully compensated affected customers.”

Zelle, jointly owned by seven US banks including Chase, BofA, and Wells Fargo, disclosed processing $806 billion in transactions last year, with reported fraud or scams accounting for less than one-tenth of one percent of the total.

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