Sen. Robert Menendez calls for better bank protections after consumers say they were scammed using Zelle
PLAINFIELD, N.J. -- New technology is making it easy to send and receive money between banks, but a U.S. senator is warning banks aren't doing enough to protect consumers.
Zelle is a fast way to send and receive money between most banks, but Alex Carrazana of Westwood, New Jersey, says he got scammed out of nearly $600 using the digital payment app to buy football game tickets from a stranger.
"He asked me for Zelle, and I didn't think anything of it so I sent him the payment via Zelle and few minutes had passed and no tickets," Carrazana told CBS2's Christine Sloan on Tuesday.
Then he realized something was wrong.
"I searched his Facebook profile that I previously reviewed that seemed legit. Now this time, it was deleted," Carrazana said.
Carrazana said he reached out to his bank, which directed him to Zelle.
"Zelle couldn't get anyone on the phone -- a live person. The automated message was, 'Reach out to Chase,'" Carrazana said.
Mary Powell of East Orange received a similar message from her bank after being scammed out of $3,500 using Zelle.
"They said, well, you authorized them so there's nothing we can do," Powell said.
Seven big banks own Zelle and Sen. Robert Menendez says its parent company, Early Warning Services LLC, needs to do more to protect consumers.
"What's wrong with giving in a short period after a transaction the ability to cancel it by the consumer?" Menendez said. "Lastly, they need to go ahead and make people whole when their system has been used to scam an individual."
In a statement, Early Warning Services LLC told CBS2, "Tens of millions of consumers use Zelle without incident, with more than 99.9 percent of payments completed without any report of fraud or scam."
For their part, every time consumers use Zelle to send money, banks do warn to make sure you trust the person you're sending the money to because once you've sent it you can't cancel it, Sloan reported.
"The consumer always has a degree of responsibility, but if you're the big banks, you have the technology ability to root out scammers," Menendez said.
The senator also asking the Consumer Financial Protection Bureau to do more to protect consumers. It said it has received a letter from Sen. Menendez and is working to protect consumers from further harm.
