As U.S. voters approach one of the most crucial elections in the country’s history, the CEO of the company behind Zelle, a major payment platform that processed $481 million in transactions in the first half of the year, is urging the public to be extra vigilant.
“This is the hot topic as we approach early November,” says Fowler, the head of Early Warning Services, the company based in Scottsdale, Arizona that operates Zelle. “You should operate under the assumption that not everything you read or see is accurate.”
In 2021, The New York Times reported on how some elderly Americans were deceived into making political donations during the previous election. This October, CNN revealed that this practice has continued into the current election cycle, with an estimated 50 elderly political donors being scammed out of $6 million. The AARP states that retirees who fall victim to scams lose an average of $120,000, resulting in financial institutions losing $1 billion annually.
Although JPMorgan, Wells Fargo, and other co-owners of Zelle are under scrutiny regarding their screening processes for fraudulent activities on the platform, Fowler has been vocal about the need for increased funding for law enforcement and a societal response to all types of scams. “I can only emphasize a heightened state of alert for those who are targeted,” he says, “and for the loved ones of this demographic to remain vigilant.”
Fowler did not disclose specific numbers related to election-related scams targeting elderly users on Zelle. However, in May, Zelle collaborated with the National Council on Aging to educate older adults on avoiding online scams. Around the same time, the AARP published a list of common election scams, including fake political action committee donation solicitations.
Recently, CNN reported on 1,000 complaints filed with government agencies and consumer advocacy groups, revealing that Republican fundraisers were the subject of 803 FTC complaints, while Democrats faced 120 complaints.
Aside from the Consumer Financial Protection Bureau’s investigation into JPMorgan, the agency is also examining whether other Zelle co-owners like Bank of America and Wells Fargo are taking sufficient measures to prevent scams on the platform. Wells Fargo announced that it was contemplating legal action against the CFPB, joining JPMorgan in this stance.
Implementing Measures to Combat Scams
Payment processors like Zelle, PayPal, Stripe, and Square have introduced additional security steps in their apps to create hurdles that prompt potential victims to reconsider sending money. “In the Zelle experience, if you are making a political donation, the app will pause and ask, ‘Are you sure about this?'” explains Fowler. “There may even be additional verification steps in place.”
The director of fraud victim support at AARP’s Fraud Watch Network, Amy Nofziger, reports receiving 500 calls per day from members aged 50 and above, informing them about various scams. According to Nofziger, Cash App, Venmo, and Zelle are frequently used by scammers.
“There is often confusion surrounding these apps because they are often promoted through banks,” says Nofziger. “Users assume they have the same protections as with their bank, which is not the case. We advise individuals to only use these apps for transactions with friends, family, or known contacts.” Unfortunately, some victims only realize they have been scammed weeks or months later, potentially leading to an increase in numbers post-election.
Payment processors are increasingly focusing on educating users to combat scams, particularly among elderly victims. Earlier this year, PayPal became the first peer-to-peer payment platform to join AARP’s BankSafe program, aimed at educating retired individuals on spotting scams. Stripe and Square also offer resources for learning about online fraud.
Aside from education and implementing security measures, Ben Chance, the chief fraud risk manager at the payment platform, called for increased law enforcement funding in an interview with Fortune in August. “Whether it’s a scam involving a pet, a romantic interest, an undelivered item, or a political scheme,” says Fowler, “Policy, law enforcement, and government engagement must be focused on addressing these issues.”