4 ms·

It is the intentional decision of zelle to be like using cash in terms of rollback guarantees. This is so that payees can accept it like cash. There's no way to

It is the intentional decision of zelle to be like using cash in terms of rollback guarantees. This is so that payees can accept it like cash. There's no way to balance the scales -- the payment system that can be rolled back has its own issues.

criddell 4y ago
If they can't rollback the transaction, Zelle should reimburse customers itself.
- SpicyLemonZest 4y ago
  We have other payment systems like credit cards which work that way. The inevitable consequences are that permissions to receive payments are tightly locked down, and the network charges fees to help cover the cost of fraudulent transactions.
  - criddell 4y ago
    > the network charges fees to help cover the cost of fraudulent transactions I don't see a problem with that. If fraud is rare, the fee would be small. If fraud is not rare, then there's a problem they should fix. For every 100 Zelle transactions, how many are due to fraud or scams? Maybe three or four? Then the fee should be 3-4%.
brigade 4y ago
That decision is as exactly as legally binding as the signs on trucks disavowing liability for falling debris. Banks might be trying to pretend Zelle isn't covered by Regulation E, but I haven't heard any good argument for why it doesn't apply, other than arguments similar to yours that they simply don't want it to.
- asdfasgasdgasdg 4y ago
  People are welcome to challenge the banks in court. It will be no skin off my back if they win. But I guess the banks have good reason that believe that they can defend their practices successfully. If not it will be the end of Venmo, cash app, and zelle -- or at least the free transfer features of those apps.
  - brigade 4y ago
    The "good reason" is that it's an extension of how banks have always treated fraudulent debits until you show knowledge of the Reg E dispute process, so it makes it outside of first-level customer support. And it won't be the end of free electronic transfers, it'll just mean acknowledging that those transfers aren't any more final than writing a check.
- NovemberWhiskey 4y ago
  Banks are not arguing that Zelle isn't covered by Regulation E. Regulation E talks about liability for "unauthorized transactions". Those are transfers "from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer". If you initiated the transfer but were misled into doing so or provided the wrong payment information or whatever, it's still an authorized transaction from Regulation E's perspective; so you are still liable for it. The only exception is if you were induced by force to initiate the transfer.
  - brigade 4y ago
    Authorization isn't "I authorize my account to be debited $X", it's "I authorize my account to be debited $X by Party Y" Errors under Reg E include any instance where Party Y is not who receives the funds, including wrong payment info.
    - NovemberWhiskey 4y ago
      That is not what the law says; what's your basis for it?

criddell 4y ago

If they can't rollback the transaction, Zelle should reimburse customers itself.

SpicyLemonZest 4y ago
We have other payment systems like credit cards which work that way. The inevitable consequences are that permissions to receive payments are tightly locked down, and the network charges fees to help cover the cost of fraudulent transactions.
- criddell 4y ago
  > the network charges fees to help cover the cost of fraudulent transactions I don't see a problem with that. If fraud is rare, the fee would be small. If fraud is not rare, then there's a problem they should fix. For every 100 Zelle transactions, how many are due to fraud or scams? Maybe three or four? Then the fee should be 3-4%.

brigade 4y ago

That decision is as exactly as legally binding as the signs on trucks disavowing liability for falling debris. Banks might be trying to pretend Zelle isn't covered by Regulation E, but I haven't heard any good argument for why it doesn't apply, other than arguments similar to yours that they simply don't want it to.

asdfasgasdgasdg 4y ago
People are welcome to challenge the banks in court. It will be no skin off my back if they win. But I guess the banks have good reason that believe that they can defend their practices successfully. If not it will be the end of Venmo, cash app, and zelle -- or at least the free transfer features of those apps.
- brigade 4y ago
  The "good reason" is that it's an extension of how banks have always treated fraudulent debits until you show knowledge of the Reg E dispute process, so it makes it outside of first-level customer support. And it won't be the end of free electronic transfers, it'll just mean acknowledging that those transfers aren't any more final than writing a check.
NovemberWhiskey 4y ago
Banks are not arguing that Zelle isn't covered by Regulation E. Regulation E talks about liability for "unauthorized transactions". Those are transfers "from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer". If you initiated the transfer but were misled into doing so or provided the wrong payment information or whatever, it's still an authorized transaction from Regulation E's perspective; so you are still liable for it. The only exception is if you were induced by force to initiate the transfer.
- brigade 4y ago
  Authorization isn't "I authorize my account to be debited $X", it's "I authorize my account to be debited $X by Party Y" Errors under Reg E include any instance where Party Y is not who receives the funds, including wrong payment info.
  - NovemberWhiskey 4y ago
    That is not what the law says; what's your basis for it?