Welcome to Innovating Payments Top 3 News Headlines for the Week of Feb. 19, 2023. In this issue, the number of Zelle fraud cases is rising, with customers losing millions of dollars. The instant and irreversible nature of these transactions makes them attractive targets for fraudsters. Meanwhile, more and more fraudsters are taking advantage of economic downturns, launching new waves of attacks, from fake jobs advertised online to phishing scams that reference hot topics like mortgage rates. Finally, the Securities and Exchange Commission is posing new challenges for the cryptocurrency market and decentralized finance with a lawsuit against Terraform Labs, operator of the failed terraUSD stablecoin, and CEO Do Kwon.
Read on to learn more.
1. Zelle Fraud Cases Explode, Customers Lose Millions (Fox 8)
The popular peer-to-peer money transfer system, Zelle, is owned by seven major banks and is embedded into many online accounts. Transactions are instant and irreversible, which is attractive to criminals, and consumers report losing millions. "I'm looking at my account and all of a sudden money is being transferred to somebody and I have no idea who they are," said Scott Schaefer of Pinellas Park. This story is playing out all over the country. Crooks either hack into consumers' devices or get in using phishing techniques, or crooks trick consumers into unknowingly sending them money through Zelle. (Read more.)
2. Three Fraud Trends to Watch Out for in 2023 (The PAYPERS)
Fraudsters tend to take advantage of economic downturns to launch new waves of attacks. This year, we have been seeing fake jobs advertised online to gather consumers' personal information, as well as phishing campaigns that reference hot topics like mortgage rates, interest rates, or energy grants. Meanwhile, consumers struggling with the cost of living may commit first-party fraud (claiming that goods were not delivered or damaged in transit), leading to increased disputes. We have also observed customers frustrated by delivery delays or service cancellations caused by industrial action instigating 'angry' chargebacks. (Read more.)
3. SEC Claims New Turf in Lawsuit Against TerraUSD Stablecoin Creator (Forbes)
The Securities and Exchange Commission is posing new challenges for the cryptocurrency market and decentralized finance (DeFi) with a lawsuit against Terraform Labs, operator of the failed terraUSD stablecoin, and CEO Do Kwon. The SEC's complaint, filed Thursday in the federal court for the Southern District of New York in Manhattan, "is advancing some very broad theories that could pose a significant threat to stablecoins, liquidity pool tokens and other decentralized finance tokens," says Mike Selig, counsel at New York-based law firm Willkie Farr & Gallagher. (Read more.)
How is your financial institution responding to the uptick in Zelle fraud cases? Speaking of fraud, what new fraud scams is your financial institution seeing due to the economic downturn? Has your institution's perspective on cryptocurrency shifted with the SEC claiming new turf in its lawsuit against TerraUSD Stablecoin Creator?
Check back soon for our next issue, highlighting the industry's most pressing and need-to-know developments. Until then, visit us online at Innovating Payments.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.