Chase is updating its Zelle user agreement to restrict payments to social media contacts starting March 23, aiming to curb fraudulent transactions on platforms like Facebook Marketplace.
The Move to Enhance Payment Security
Nearly 50% of scams reported to Chase originate from social media. The bank emphasizes that Zelle is intended for trusted contacts, not for purchases from strangers on social media marketplaces or messaging apps.
The new agreement states:
“The Service is not intended, and should not be used, for the purchase of goods from retailers, merchants, or the like, including on or through social media or social media marketplaces or messaging apps.”
Under the update, Chase may block payments identified as stemming from social media contact or request additional information to assess potential fraud risks.
Zelle’s Popularity and Regulatory Scrutiny
With over 150 million users and $1 trillion in annual transactions, Zelle is widely used but has also faced regulatory scrutiny. Last year, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo, alleging they allowed fraud to “fester” on the Zelle platform.
