Fraud is flourishing on Zelle. The banks say it’s not their problem.

Justin Faunce lost $500 to a scammer impersonating a Wells Fargo official in January and hoped that the bank would reimburse him. Faunce was a longtime Wells Fargo customer and had immediately reported the scam — involving Zelle, the popular money transfer app.

But Wells Fargo said the transaction wasn’t fraudulent because Faunce had authorized it — even though he had been tricked into transferring the money.

Faunce was shocked.

Consumers love payment apps like Zelle because they’re free, fast and convenient. Created in 2017 by America’s largest banks to enable instant digital money transfers, Zelle comes embedded in banking apps and is now by far the country’s most widely

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