8 ms·

I watched the hearing a while back and honestly don’t get the fuss Warren in making in this specific scenario. She calls out scenarios where people willingly s

• mimikatz 4y ago
  The reason is incentives and lack of protections. If banks don't eat the cost of fraud they don't properly protect people from being preyed upon.
  • anon291 4y ago
    Wire fraud is a huge problem already.
  • lotsofpulp 4y ago
    So people expect credit card/debit card level protection without paying the credit card/debit card fees or going through the process of merchant vetting by a payment processor?
    • colechristensen 4y ago
      In other words, banks shouldn’t be allowed to drop those protections to provide a cheaper service. And the fees are mostly just profit. Banks are responsible for knowing their customers.
      • NovemberWhiskey 4y ago
        >Banks are responsible for knowing their customers. What do you think that means?
      • gruez 4y ago
        >In other words, banks shouldn’t be allowed to drop those protections to provide a cheaper service. Some much for freedom of choice. We the state, decided that you can't be trusted with making decisions about who to transact with, so we mandate that you use a transfer service with arbitration/escrow so you won't be financially harmed. It doesn't matter if you're sending money to a landlord that you lived at for a few years, or splitting a restaurant bill with friends. You must use a transfer service with this service provided, and pay the 1% fee used to fund such a scheme (note this is actually less than credit card interchange, which is around 2-3%).
        • bsder 4y ago
          > Some much for freedom of choice. We the state, decided that you can't be trusted with making decisions about who to transact with, so we mandate that you use a transfer service with arbitration/escrow so you won't be financially harmed. You say this like these regulations magically just appeared fully formed from the head of Zeus ... These regulations exists precisely because the fraud was rampant enough that it became a sufficient threat that people would quit using the financial system altogether.
          • xboxnolifes 4y ago
            People already have the option to not use zelle. If you want payment protection, use a service with it. Sometimes I just want to easily send money to friends/family without transaction fees.
• mullingitover 4y ago
  Zelle is an alternative to ACH, and I’m glad it exists! However there are a lot of consumer protections in the ACH system, not so much with Zelle.
  • NovemberWhiskey 4y ago
    Like what? Zelle has exactly the same consumer protections as ACH, as far as I know. It's exactly the same consumer protection law in each case.
    • funstuff007 4y ago
      I know it's very easy to reverse an ACH transaction. The receiving bank (not the receiving account) is on the hook for 60 days (maybe more).
      • mullingitover 4y ago
        This is specifically what I'm talking about. ACH gives a ridiculously long window to contest and reverse the transaction. Zelle is more like a wire, for better or for worse: when that money is transferred it's a done deal and not reversible.
      • refurb 4y ago
        Right, but typically ACH is only reversed in cases of fraud, not because of some consumer issue (the product wasn't what I expected). And it's not an easy process to complete, it can take months to have access to your funds again.
        • mullingitover 4y ago
          An ACH transfer can also be reversed if the amount transferred was incorrect, if it's a duplicate transaction, or if it was sent to the wrong account number. Also, there's not a lot of pushback from the bank if a customer asserts ACH fraud when asking for a reversal. Good thing, because it's pretty trivial to get someone's routing and account number, they're printed on every check you write. Zelle, on the other hand, will not reverse a payment if you get the phone number wrong.
• colechristensen 4y ago
  With other payment methods there are many methods to reverse transactions in response to fraud, which includes a person willingly sending money after being deceived. There’s no reason that an electronic payment method can’t provide that kind of protection, financial institutions have the responsibility to know who their customers are and to not facilitate fraud. They should be on the hook to be able to reverse a transaction. A person should not be able to create an account, commit fraud, and run away with the proceeds. A bank is responsible for flagging suspicious transactions especially for new accounts… making them hold the bag when there is fraud means they will be motivated to accurately judge risk and refuse transactions when it is high.
  • miohtama 4y ago
    60% of fraud is “friendly fraud” where you send your money to your associate (or make online card payment), call bank, accuse fraud and double your money. Alternative demand money back from a completely fine product and delivery. With too much consumer protection friendly fraud goes up easily. People will scam the system other way around.
  • refurb 4y ago
    But banks never claimed their payment services were for buyers and seller, only cash transfers. If you want consumer protection, either pay by credit card or use another service. When I make a Zelle transfer I get a big warning (and a box I have to check) which says "You can't reverse this transfer once complete". It's like complaining Amazon doesn't sell airline tickets. Of course not, they never intended to sell airline tickets.
  • none_to_remain 4y ago
    > making them hold the bag when there is fraud means they will be motivated to accurately judge risk and refuse transactions when it is high. Except I would like to be able to use my own money, please
  • pasttense01 4y ago
    Consider the payment system call cash: there is no way to reverse fraudulent transactions except via the court or criminal justice system. I think it is very reasonable to have an electronic cash payment system which you would use for the same purposes you currently use cash--mostly either in person transactions or with people you trust. >"A person should not be able to create an account, commit fraud, and run away with the proceeds." Well this is what we have a criminal justice system for.
• alxmdev 4y ago
  It doesn't have to be something egregious like the Nigerian Prince. It could be a Craigslist concert tickets deal where you pay in advance and never hear from the "seller" again. Why be callous to innocent victims? Unlike cash, Zelle is a digital system that could provide some protections for all parties involved, like the option to file a dispute.
  • deleted 4y ago
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  • dymk 4y ago
    Having charges be very difficult to reverse is a protection to the user. Treat it like cash which you don’t need to carry a wallet around for.
    • alxmdev 4y ago
      Why treat it like cash when it's not cash, but a digital service pushed by banks? There will always be scum that abuse a system, but the way it is now the odds are stacked against honest people.
      • refurb 4y ago
        There is no free lunch. Plenty of people complain about the delay in sending cash digitally. Or Paypal siding with a buyer and the seller having their cash pulled back automatically because the buyer lied and said they never got it. Or money being tied up for months as resolutions to disagreements are verified. Either you accept a bunch of controls to reduce fraud (and all the complexity and delay that goes along with it) or you get instant, irreversible payment transfers. Your choice.
      • dymk 4y ago
        Yeah, just like cash. Are you saying cash has no place in society? Certainly not I'd imagine - it has plenty of upsides. You just have to understand the risk model and what you can and cannot do with it.
      • 4y ago
• LatteLazy 4y ago
  Agreed. We need to draw a line between complex or technological fraud and "people giving away their money of their own free will then complaining".