Consumer complaint received 2023-12-17
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Early Warning Services, LLC (ID)

On or about XX/XX/XXXX, I was in the process of renting a house that I found on XXXX. I contacted the " owner '' of the house via phone and made all the arrangements to rent the house, including submitting a rental application to the " owner '' via email- which was accepted. I was instructed to to send a {$500.00} deposit via Zelle to hold the property, at which time I would then meet the " Owner '' at the property and receive a lease to sign, do the walkthrough, make initial payment via cashiers check, and obtain the keys to the property. After I sent the {$500.00} to a XXXX XXXX via Zelle, I was suddenly unable to make contact with the " Owner '' either through email or via phone or text. 

I then realized I had been scammed and that a criminal was impersonating the Owner of the property listed on XXXX. Within an hour I contacted both the Zelle Fraud Department and XXXX XXXX XXXX XXXX Fraud Department, and informed both of them of the fraud, in hopes that they would easily credit the {$500.00} back from the scammer account - after all, they had the name and account the funds were transferred to ( just minutes ago ). The representative at Zelle stated there was nothing that could be done because I initiated the transfer, even though it was fraud by a criminal impersonating the owner of the home. XXXX later sent me a letter dated XX/XX/XXXXXXXX  stating, " Based on our investigation no errored occurred. '' I have attached a copy of this letter herein. 

I wish to file a complaint that both Zelle and XXXX failed to easily credit back the {$500.00} from the account that had accepted the funds via fraud. 

1. The Electronic Fund Transfer Act ( EFTA ) and Regulation E apply to an electronic fund transfer that authorizes a financial institution to debit or credit a consumer 's account. 12 CFR 1005.3 ( a ).

2. The term electronic fund transfer or EFT means any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer 's account. 12 CFR 1005.3 ( b ) ( 1 ). 

3. Accordingly, Regulation E applies to any person-to-person ( P2P ) or mobile payment transactions that meet the definition of EFT, including debit card, ACH, prepaid account, and other electronic transfers to or from a consumer account. 12 CFR 1005.3 ( b ) ( 1 ) ( v ) ; Comment 3 ( b ) ( 1 ) -1.ii.

4. Person-to-person or P2P payments allow a consumer to send money to another person without needing to write a check, swipe a physical card, or exchange cash.Any P2P payment that meets the definition of EFT is covered by EFTA and Regulation E . 

5. A financial institution can not consider a consumer 's negligence when determining liability for fraudulent EFT 's under regulation E. Regulation E sets forth the conditions in which consumers may be held liable for unauthorized transfers, and its commentary expressly states that negligence by the consumer can not be used as the basis for imposing greater liability than is permissible under Regulation E. 12 CFR 1005.6 " Impersonator fraud was the most-reported scam in XXXX across all payment methods in the XXXX, XXXX for {$2.00} XXXX in losses, according to the Federal Trade Commission . '' Payments App Zelle Begins Refunds for Imposter Scams After XXXX XXXX XXXXXXXX, XX/XX/XXXX - XXXX XXXX XXXXXXXX Zelle Finally Caves After Years of Refusing to Refund Scam Victims XXXX XXXX XX/XX/XXXX - XXXX XXXX XXXX