Fraud is flourishing on Zelle. Banks say this is not their problem.

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Fraud is flourishing on Zelle. Banks say this is not their problem.

Another Wells Fargo client, Julia Gibson, lost $2,500 in a similar scam in October. When he reported the fraud to the bank, it gave him a provisional credit for the lost cash. But in January, the bank abruptly canceled the credit, sent its balance to zero and imposed an overdraft fee. The bank had decided that the loss was not fraud.

“What was so frustrating about this whole thing was that every customer service representative I spoke with told me that a lot of people were experiencing this,” Ms. Gibson said.

In their appeal to Wells Fargo, Mr Fons and Ms Gibson cited Consumer Bureau rules regarding fraudulent damages, but the bank repeatedly rejected them.

“There are certain indicators that we look for in the investigation to help us know that there has in fact been an account fraud,” Wells Fargo wrote to Mr Fons on 23 February. “During the investigation, we were unable to find any of those indicators present and denied the claim.”

After The Times contacted the bank, it returned Ms. Gibson.

“We are committed to complying with all regulations governing transactions,” said Jim Setz, a spokesman for the bank. “We are actively working to raise awareness of common scams to help prevent these heartbreaking incidents.” He declined to discuss specific customer matters.

Other victims of fraud trying to recover their money from banks have had better luck citing the law.

Ken Page-Romer, a psychotherapist and author who lives in Long Beach, NY, took $19,500 out of his account in November after he received spoofed text alerts and calls from Citigroup phone numbers. The bank initially denied their claims. At the insistence of her husband Gregory, a financial advisor, Mr. Page-Romer wrote a letter to the bank citing Regulation E, and sent copies to the police and banking regulators. Citi soon returned their stolen money.

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