In the Senate, Democrats, including Elizabeth Warren, issued an appeal to financial regulators to take actions aimed at curbing fraudulent activity, against the P2P payment service owned by Zelle Bank.

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Zelle is currently under the management of an early warning service. This management belongs to the seven largest US banks. The bank was founded in 2017. Since the start of work, the financial institution has demonstrated positive results. By the end of 2022, the bank secured transactions totaling $629 billion. This indicator is twice as high as the same result of the activities of the nearest competitor of a financial institution, which is Venmo.

Significant amounts of financial resources, the transactions which are carried out through Zelle, have become a target for fraudsters, and have provoked criminal activity at a high level. This is stated in a letter from Elizabeth Warren and her fellow senators Bob Menendez, Jack Reed, Sherrod Brown, and Mark Warner, which was sent to the Federal Reserve Board, the FDIC, the National Administration of Credit Unions, and the OCC.

The letter calls on regulators to analyze the process of reimbursing customers and the anti-money laundering (AML) methodology of depository institutions that are associated with the Zelle network.

Senators express concern because currently depository institutions adhere to the position in their ideology of customer relations, which does not provide for the obligation to protect consumers’ funds from encroachment by fraudsters. According to the authors of the letter, these institutions manipulate the definitions of authorized and unauthorized transactions to avoid paying refunds.

Representatives of Zelle have not yet commented on the claims outlined in the senators’ letter.

As we have reported earlier, Mastercard and Network International Unveil Fraud Prevention Tech.