Sen. Elizabeth Warren calls Wells Fargo CEO 'evasive,' presses bank for fraud complaints on Zelle

Sen. Elizabeth Warren called Wells Fargo CEO Charles Scharf "evasive," saying the bank's answers to her questions astir fraud crossed the Zelle outgo level were misleading, "insulting and useless."

The Massachusetts Democrat, who sits connected the Senate Banking, Housing and Urban Affairs Committee, said the complaint of Wells Fargo customers who reported fraud oregon scams connected Zelle was much than doubly arsenic precocious arsenic different large banks and 2.5 times higher successful 2022 than successful 2019 among Wells Fargo customers. She said the slope "attempted to mislead me" by providing constricted information from 2018 and 2021.

"Your responses to the remainder of my questions were insulting and useless to your customers, who person been the victims of fraud and scamms connected Zelle and are unaware of the higher risks they look connected the level arsenic customers of your bank," she wrote successful a missive sent Monday to Scharf.

Warren pressed the slope and and Early Warning Services, the genitor institution of wealth transportation level Zelle, to merchandise much information connected fraud and scam complaints reported by banking customers. Requests for remark from Wells Fargo and Early Warning Services weren't instantly returned.

She said anterior requests for circumstantial information compiled for an October investigation of fraud and scam complaints by consumers went unheeded.

"I americium disappointed by your evasive and misleading reply to my October 6, 2022 missive asking astir the extraordinarily precocious and rapidly expanding instances of fraud and scams affecting Wells Fargo customers connected the Zelle wealth transportation platform," Warren wrote. "Your customers – who person successful caller years endured dozens of examples of lawbreaking and mistreatment by your slope – merit better."

Warren's study said respective large banks, including Wells Fargo, whitethorn person violated national law by failing to refund a immense bulk of customers defrauded connected Zelle. She recovered that the 7 banks that ain Zelle and its genitor institution — Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank and Wells Fargo — did not repay customers astir of the clip successful 190,000 cases successful 2021 and the archetypal fractional of 2022 where consumers said they were scammed connected Zelle.

The magnitude of the fraudulent payments reached $213 million, according to the report.

Wells Fargo was among respective banks that refused to merchandise cardinal fraud information, Warren said, though the frequence of Zelle fraud and scam reports by the bank's customers was "more than doubly arsenic precocious arsenic it was for comparable banks for which we had data," according to the letter.

Jim Seitz, a spokesperson for Wells Fargo, told CNBC successful October that Warren's investigation is "misleading and inaccurate."

"We invited the accidental to person a constructive treatment astir wholistic Zelle information and manufacture trends — not conscionable that of 3 banks," Seitz said.

Early Warning Services besides defended Wells Fargo successful its effect to the results of Warren's Oct. 3 report, saying that "recent statements regarding Wells Fargo's fraud and scam rates are inaccurate. Wells Fargo's rates of reported fraud and scams are extraordinarily debased and comparable to the Zelle Network arsenic a whole, wherever rates of reported fraud and scams correspond little than 0.1% of each transactions," according to the letter.

The institution besides told CNBC successful October that "any outer investigation done is incomplete and does not bespeak the efforts and information reported by much than 1,700 fiscal institutions connected the Zelle Network."

The legislator called Early Warning Services' effect "inaccurate" and said it is "not accordant with the information provided to maine by Wells Fargo and different banks that are portion of the Zelle network," according to the letter.

Warren besides said the reply she received from Wells Fargo was "wholly inadequate fixed the scope of the problems."

"For example, you stated that information we published connected Zelle-related problems astatine Wells Fargo and different banks contained 'apples-to-oranges comparisons,' due to the fact that Wells Fargo's 'response to your information petition included gross claims [and] … [o]ther responses whitethorn person utilized antithetic dimensions,'" Warren wrote. "But this assertion, which is an effort to minimize the interaction of the occupation astatine Wells Fargo, is false."

Warren asked the slope for up-to-date accusation connected the grade of fraud scams reported by customers, reimbursement rates and the dollar worth of reimbursements to scammed customers, she says, for the 5th time. The updated information volition screen 2017 to 2021 and this January done September.

The legislator asked Early Warning Services for akin information, successful summation to the fig of cases wherever Zelle referred scams to instrumentality enforcement oregon to national oregon authorities slope regulators, spanning each of the past 5 afloat calendar years, and from Jan. 1 to the present. Warren gave each institution a deadline of Nov. 21.

"If Wells Fargo and EWS really privation to acceptable the grounds consecutive astir fraud and scams connected Zelle, past they should alteration people and supply the American radical with implicit data," Warren said successful a statement. "Customers who were defrauded and scammed connected Zelle deserve afloat transparency."

In October, Warren appealed to the Consumer Financial Protection Bureau to usage its rule-making authorities nether the Dodd-Frank Act to summation user protections connected peer-to-peer wealth transportation platforms.