Who is liable when a consumer authorizes a payment and then realizes they were scammed?
This continues to be a major industry-wide question. While interested parties seek data to support their position, that data is not easily accessible — and so, the answer remains unclear.
One fact is clear: Fraud and scams are scary and harmful to consumers.
In her recent articles in American Banker, journalist Kate Berry sheds light on the lack of clarity that financial institutions face regarding these questions. For example, according to Facilitating Fraud, a report by Senator Elizabeth Warren, the banks that own Zelle reimburse anywhere between 14% to 82% of consumers’ fraud claims — presenting a major discrepancy. Plus, while the report states that Wells Fargo has 2.5 times more complaints about fraud than customers of other banks, Wells Fargo denies that this is the case.
A creative approach is required to address this complex debate. Today, consumers share complaints with the Consumer Financial Protection Bureau (CFPB) about how they have been scammed, and, as part of the regulatory process, financial institutions investigate and respond — at times with monetary relief.
Using the PositivityTech® Intelligent Platform and analyzing CFPB complaint narratives as a data source, financial institutions broaden their perspectives and reveal opportunities for action.
Read on to see what PositivityTech reveals about payment-related fraud and scams:
How are consumers describing their problems?
In the last 12 months, there were a total of 10,388 complaints about payment-related fraud and scams submitted to the CFPB.
Within the last 90 days, customer complaints about payment-related fraud and scams, unauthorized transactions, and other transaction problems continue to rise.
Which institutions have the most customer complaints about payment-related fraud and scams?
PositivityTech reveals that payment-related issues are an industry-wide problem that goes beyond Zelle and the banks that own Early Warning Services, and includes PayPal and Block, for example. In the case of the data below, which is based on customer complaints to the CFPB, Wells Fargo does not appear to have 2.5 times the number of payment-related complaints about fraud and scams than other similar-sized institutions.
These are examples of customer complaints about payment-related fraud and scams.
How are institutions resolving reports of fraud and scams?
Overall, eight percent of all payment-related customer complaints to the CFPB about fraud or scams are resolved with monetary relief. Across the seven banks that own Early Warning Services, Bank of America and PNC most often respond to complaints about fraud and scam with monetary relief.
The following customer complaints about payment-related fraud and scams were resolved with monetary relief.
Who are the people most affected by fraud and scams?
The CFPB tags complaints from older Americans and service members. Based on this, PositivityTech reveals that, in the last 12 months, customer complaints about payment-related fraud and scams from older Americans are on the rise.
These customer complaints about payment-related fraud and scams come from older Americans.
Identifying the scary truth in your customers’ voices
Fraud and scams are undeniably business problems — and they are scary, invasive problems that impact real people’s lives. These problems exist across industries, the solutions are complex — and the first step is listening to our customers’ voices.
How are fraud and scams affecting your customers? How is your institution responding? How do you compare to other institutions? You can explore all of these questions with PositivityTech. Contact me at marcia.tal@positivitytech.com to dive in. I look forward to helping you turn negatives into positives.