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One of the main benefits of zelle was it couldn't be clawed back. Scams suck but paypal and other related apps have a major problem where the money gets clawed
by Cody-99 3y ago
One of the main benefits of zelle was it couldn't be clawed back. Scams suck but paypal and other related apps have a major problem where the money gets clawed back after a legitimate transaction/deal is complete. Hopefully steps are taken to ensure this type of fraud doesn't become an issue.
- vkou 3y agoZelle could always place a high bar for clawbacks, like, say, requiring a police report.
- bastawhiz 3y agoA police report is a high bar for a $20 transaction (perhaps even way too high) but too low for, say, a series of transactions adding up to $10,000. Having a police report is easy if, say, you're employed by the police.
- vkou 3y agoThere's nothing that stops Zelle from doing further diligence around a $10,000 fraud, the police report is just there to significantly raise the barrier for a fraudster disputing charges. It's tough to do fraud at scale when you have to show up to a police station, give them all your info, and leave a detailed paper trail.
- tantalor 3y agoOnce the money is frozen you could go straight to small claims court for those $10k disputes. Anything bigger call the lawyers.
- grepfru_it 3y agoThis is basically the paypal model. No one has time for small claims court
- lxgr 3y agoIf "corrupt police officers committing highly visible/papertrailed fraud" is in your threat model for payment scams, I wouldn't be surprised if other payment methods were vulnerable to this as well.
- geoduck14 3y ago>Having a police report is easy if, say, you're employed by the police. Having a police report is easy if you are in America. All it takes is a phone call and a story. A police report is super simple to get
- bluejekyll 3y agoYup, in most cases now you can just submit them online, probably because so many things require them.
- lxgr 3y agoWhat matters isn't really how easy it is to get, but rather than it raises the bar for making false statements.
- brewdad 3y agoDo criminals overseas really care if they have an arrest warrant in Lane County Oregon for filing a false police report?
- lxgr 3y agoHopefully there are some hurdles for criminals overseas in opening an US checking account (which is a prerequisite to participate in Zelle)!
- jstarfish 3y agoThis is where those roadside "work from home" opportunities lead. You become a part-time money launderer who routes stolen funds through your own personal accounts and wire-transfers the balance overseas to them.
- lxgr 3y agoYes, and in that case, the unwitting (but really often semi-witting) money mule is likely to be left holding the bag, e.g. if the outbound international wire ends up being non-reversible, but the inbound Zelle payment they're "forwarding" does get reversed.
- pyuser583 3y agoI can make a police report online in five minutes.
- gosub100 3y agoIn person, with a valid ID. A lot of police reports are done online, especially for property crimes. It would be too easy for criminals to automate them. If it's an e-fraud allegation, it should require showing physical ID with a detective, and/or a video report (yes I know about deepfakes) to prevent script kiddies from automating the process.
- tryptophan 3y agoYeah this was the only good thing about zelle...once you got money...you had it. Now there is all this nonsense about how your money could just disappear at anytime in the next 90 days and there is nothing you can do about it. Guess the feds really hated the idea of normal peasants having a way to transact with finality; something we obviously need to be "protected" from.
- smt88 3y agoTransactions with finality are a bug, not a feature. Reversing a transaction (under certain circumstances) is enshrined in the almost the entire history of US common law and is protected in federal statutes. A money transfer system that prohibits reversals doesn't reflect what money needs to do.
- hahajk 3y agoWait, how so? Didn't most transactions take place in cash for most of history? Cash isn't reversible.
- KptMarchewa 3y agoCash is reversible in a way that you find person that you exhanged goods and services with and they give you your money back, whether voluntarily or forced by court order.
- eviks 3y agoSo no different from the previous Zelle model
- dnissley 3y agoIt's quite interesting that cash escapes such criticisms by virtue of simply not being a "system". Perhaps crypto will win this space after all.
- 3y ago
- distortionfield 3y agoThere are always two error rates.
- Analemma_ 3y agoIn theory I like the idea of an instant-settlement irreversible payment service, but realistically I don't think such a thing can exist for long. Pretty much by its nature, it will attract more and more scams until anger and political pressure build up enough that it is forced to implement protections and clawbacks. "Delayed settlement with clawbacks" is a stable equilibrium in a way "instant settlement with no protection" is not.
- wmf 3y agoYep, we already saw this years ago with Dwolla (which was much worse than Zelle because it was crypto-adjacent).
- TulliusCicero 3y agoI kind of agree, though to be fair, "instant settlement with no protection" is how cash works. There is no mechanism with physical cash transference itself to claw back the money from a scam. You can go talk to the police and they might be able to help, but nobody can go talk to the Lords of Cash and convince them to magically teleport the currency back into your hands.
- brigade 3y agoThat mechanism for cash is called "civil court" Yeah you're SOL if you give cash to someone whose identity you don't know, but that's hard to do unintentionally with cash. Whereas Zelle will shield scammers' identities so your recovery options begin and end with Zelle.
- dylan604 3y agoDoes an escrow based transaction help prevent scams. What does history have to shows us with SilkRoad as an example?