Sen. Elizabeth Warren calls Wells Fargo CEO ‘evasive,’ presses financial institution for fraud complaints on Zelle fee platform

Sen. Elizabeth Warren known as Wells Fargo CEO Charles Scharf “evasive,” saying the financial institution’s solutions to her questions on fraud throughout the Zelle fee platform have been deceptive, “insulting and ineffective.”

The Massachusetts Democrat, who sits on the Senate Banking, Housing and City Affairs Committee, stated the speed of Wells Fargo prospects who reported fraud or scams on Zelle was greater than twice as excessive as different large banks and a pair of.5 occasions greater in 2022 than in 2019 amongst Wells Fargo prospects. She stated the financial institution “tried to mislead me” by offering restricted knowledge from 2018 and 2021.

“Your responses to the rest of my questions have been insulting and ineffective to your prospects, who’ve been the victims of fraud and scams on Zelle and are unaware of the upper dangers they face on the platform as prospects of your financial institution,” she wrote in a letter despatched Monday to Scharf.

Warren pressed the financial institution and Early Warning Providers, the dad or mum firm of cash switch platform Zelle, to launch extra knowledge on fraud and rip-off complaints reported by banking prospects. Requests for remark from Wells Fargo and Early Warning Providers weren’t instantly returned.

She stated prior requests for particular knowledge compiled for an October evaluation of fraud and rip-off complaints by shoppers went unheeded.

“I’m disenchanted by your evasive and deceptive reply to my October 6, 2022 letter asking concerning the terribly excessive and quickly rising cases of fraud and scams affecting Wells Fargo prospects on the Zelle cash switch platform,” Warren wrote. “Your prospects – who’ve in recent times endured dozens of examples of lawbreaking and mistreatment by your financial institution – deserve higher.”

Warren’s report stated a number of large banks, together with Wells Fargo, could have violated federal legislation by failing to refund a overwhelming majority of consumers defrauded on Zelle. She discovered that the seven banks that personal Zelle and its dad or mum firm — Financial institution of America, Truist, Capital One, JPMorgan Chase, PNC Financial institution, U.S. Financial institution and Wells Fargo — didn’t repay prospects more often than not in 190,000 instances in 2021 and the primary half of 2022 the place shoppers stated they have been scammed on Zelle.

The quantity of the fraudulent funds reached $213 million, in keeping with the report.

Wells Fargo was amongst a number of banks that refused to launch key fraud data, Warren stated, although the frequency of Zelle fraud and rip-off reviews by the financial institution’s prospects was “greater than twice as excessive because it was for comparable banks for which we had knowledge,” in keeping with the letter.

Jim Seitz, a spokesman for Wells Fargo, instructed CNBC in October that Warren’s evaluation is “deceptive and inaccurate.”

“We welcome the chance to have a constructive dialogue about wholistic Zelle knowledge and trade tendencies — not simply that of three banks,” Seitz stated.

Early Warning Providers additionally defended Wells Fargo in its response to the outcomes of Warren’s Oct. three report, saying that “latest statements concerning Wells Fargo’s fraud and rip-off charges are inaccurate. Wells Fargo’s charges of reported fraud and scams are terribly low and akin to the Zelle Community as a complete, the place charges of reported fraud and scams symbolize lower than 0.1% of all transactions,” in keeping with the letter.

The corporate additionally instructed CNBC in October that “any exterior evaluation executed is incomplete and doesn’t replicate the efforts and knowledge reported by greater than 1,700 monetary establishments on the Zelle Community.”

The senator known as Early Warning Providers’ response “inaccurate” and stated it’s “not per the information offered to me by Wells Fargo and different banks which are a part of the Zelle community,” in keeping with the letter.

Warren additionally stated the reply she obtained from Wells Fargo was “wholly insufficient given the scope of the issues.”

“For instance, you said that knowledge we revealed on Zelle-related issues at Wells Fargo and different banks contained ‘apples-to-oranges comparisons,’ as a result of Wells Fargo’s ‘response to your knowledge request included gross claims [and] … [o]ther responses could have used totally different dimensions,'” Warren wrote. “However this assertion, which is an try to attenuate the impression of the issue at Wells Fargo, is fake.”

Warren requested the financial institution for up-to-date data on the extent of fraud scams reported by prospects, reimbursement charges and the greenback worth of reimbursements to scammed prospects, she says, for the fifth time. The up to date knowledge will cowl 2017 to 2021 and this January by means of September.

The senator requested Early Warning Providers for related data, along with the variety of instances the place Zelle referred scams to legislation enforcement or to federal or state financial institution regulators, spanning every of the final 5 full calendar years, and from Jan. 1 to the current. Warren gave every firm a deadline of Nov. 21.

“If Wells Fargo and EWS actually wish to set the file straight about fraud and scams on Zelle, then they need to change course and supply the American folks with full knowledge,” Warren stated in an announcement. “Prospects who have been defrauded and scammed on Zelle deserve full transparency.”

In October, Warren appealed to the Client Monetary Safety Bureau to make use of its rule-making authorities beneath the Dodd-Frank Act to extend client protections on peer-to-peer cash switch platforms.