A federal investigation into banking giant JPMorgan Chase is targeting how the bank handles and protects potential victims of fraud, according to a new report.
The Consumer Financial Protection Bureau (CFPB) is investigating whether the bank is properly reimbursing customers and effectively eliminating scammer’s bank accounts, reports CNBC, citing sources who requested anonymity while talking about an ongoing investigation.
The agency’s concerns are centered on how the bank manages customers that move money on Zelle, and investigators are reportedly also looking into similar concerns about Wells Fargo and Bank of America.
In a recent filing, Chase confirmed an inquiry is underway and said it’s “evaluating next steps, including litigation.”
The bank has declined to publicly comment on the CFPB’s investigation.
The Senate’s Permanent Subcommittee on Investigations recently determined Chase, Wells Fargo and BofA reimbursed victims who reported scams on Zelle 38% of the time in 2023, a drop from 62% in 2019.
The subcommittee also says the three banks have collectively refused to reimburse $880 million in disputed Zelle transactions between 2021 and 2023.
The Electronic Fund Transfer Act explicitly protects people who lose money to unauthorized transfers, but not offer the same protection when customers are tricked into into approving illicit transactions.
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