In the past few years, payment apps like Venmo and Zelle have exploded in popularity.
These apps are fast, free, and easy to use. This makes it convenient for customers.
Millions of people use the apps to send and transfer money.
Last year alone, people used Zelle to send over $490 billion.
But the popularity of the apps also makes them a target for hackers.
Here’s a recent example…
Chuck R. lives in New York City. One day he was the target of a hacker who stole his cell number.
The hacker had Chuck’s cell number transferred to their phone. The hacker then used Chuck’s number to access his bank accounts.
The thief was able to get into Chuck’s Bank of America account and steal over $3,000 using Zelle.
Chuck immediately contacted the bank and reported the theft.
But his claim was denied because Bank of America said the transaction did not appear to be unauthorized.
He sent the bank documentation including a police report and a letter from Verizon. The letter explained that Chuck’s phone had been hacked.
Chuck asked the bank to reconsider his claim to have the stolen funds returned. After 45 days the bank told him to keep waiting.
“I said repeatedly, ‘I’ve never used Zelle. I never authorized this.’” said Chuck.
After 34 years as a Bank of America customer, he was shocked at how he was being treated.
The payment app Zelle is owned by seven different banks. Yet, each of the 1,500 banks that offer Zelle to their customers uses their security practices with the app.
So, it can be hard to say who is at fault or which companies’ security lapses allowed the hacker to be successful.
The theft that Chuck experienced is one small fraction of the problems with payment apps.
There are constant scammers that use Zelle and similar apps to trick victims into sending money.
Oftentimes criminals will pose as bank employees to trick people into transferring money.
In these types of cases, banks will refuse to refund the transaction because they claim that the customer initiated the transfer, so to them, it’s “authorized.”
This type of scam and theft is happening more often.
So, here are a few things you can do if your bank refuses to return money that has been legitimately stolen.
Call the bank immediately:
The longer you wait to report stolen funds, the more difficult the bank will make it to return the funds.
Many banks require you to report stolen funds within two days, but this varies with each institution.
As soon as you notice the stolen funds you should lock your account.
This can be done by logging into your online account. Lock or pause all transactions for the account.
This is another reason why you should regularly be monitoring bank statements. If you notice a fraudulent charge on your statement, you need to notify the bank right away.
The longer it’s been since the fraud occurred the less likely the bank will return the stolen funds.
Write a letter:
After you have contacted the bank by telephone you should follow up with a letter.
The bank should have provided you with a claim number that you can reference in your letter.
Also, include a copy of a police report if you filed one. I would suggest filing a police report any time money is stolen from your account.
Like Chuck, if there is documentation from your cell carrier that your phone was hacked, include this as well.
Or if your work computer was hacked your employer should provide evidence of the breach.
You want to reiterate your fraud claim to your bank and provide them with the evidence to make it less likely they will deny your claim.
File a complaint:
If your financial institution denies your claim or takes a long time to respond you should consider filing a complaint.
Contact the Consumer Financial Protection Bureau (CFPB) to file a complaint about the bank.
The CFPB enforces federal consumer financial laws and protects customers.
Once a financial institution acquires $10 billion in assets, it is subject to the regulations of the CFPB.
If more banks refuse to refund stolen funds, then customers will get fed up.
Customers expect their money to be protected.