Payment Scams on Social Media Prompt Chase Bank to Take Preventative Measures

Almost 50% of the scams Chase Bank customers reported to the bank from June 1 to December 31, 2024, began on social media platforms, according to Chase customer claims of wire transfer and Zelle scams for that period.

The abundance of payment scams that start on social media sites has led Chase to take bold moves to help customers evade online fraud. The bank recently announced that — beginning on March 23 — it will no longer allow customers to make Zelle payments to contacts forged through social media interactions.

Chase’s move is the latest strike against Zelle, which allows users to quickly send payments from their bank account to a recipient’s account. In late 2024, the Consumer Financial Protection Bureau (CFPB) launched a lawsuit against Zelle and three of its owner banks, including JPMorgan Chase. Chase Bank is a subsidiary of JPMorgan Chase.

The CFPB claims in its suit that Zelle and its owner banks were in such a hurry to introduce the peer-to-peer payment tool that they never ensured it offered users sufficient protection from fraud.

“By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” said Rohit Chopra in a statement accompanying the lawsuit. Chopra was the director of the CFPB through January 2025.

Globally, losses due to scams and schemes, including cyber-enabled fraud, topped $485 billion in 2023, according to a recent financial crimes report from Nasdaq.

And nearly one-third of those losses came from scams launched against individuals in the Western Hemisphere.

“Ultimately, we know that no single company, industry, technology, or government is going to solve the complex problem of financial crime alone,” Adena T. Friedman, Nasdaq’s Chair and CEO, said in the report. “We all have a responsibility — to ourselves and to the world — to be part of the solution.”

Credit cards provide value to consumers in more ways than one. In addition to allowing people to buy something today and pay for it later, credit cards offer rewards that can boost savings for cardholders.

But many credit cards also offer a benefit known as purchase protection that provides cardholders with an avenue to reclaim money they’ve spent through the card under certain conditions. Purchase protection may not get as much attention as flashier card benefits like access to airport lounges and exclusive concerts, but it’s a recourse that cardholders can turn to when they’re victims of fraud. 

Payments inadvertently sent to criminals made through Zelle can be more damaging to consumers because victims can’t easily recover funds they’ve sent through the payment service. Sending a bad actor $100 through Zelle is similar to handing a criminal a $100 bill in person. Once the money leaves your hand, or bank account, it’s highly unlikely you’ll ever see it again.

That makes social media platforms a fertile ground for criminals seeking to instigate push-payment scams, which involve a victim sending money to a person claiming to be someone they aren’t. On social media sites, criminals can conceal their identity to pose as legitimate businesses or feign romantic interest in a target in hopes of coercing them to send them money.

We caught up with Fergal Glynn, Chief Marketing Officer and AI Security Advocate with  Mindgard, to gauge his thoughts on payments scams criminals carry out online. 

“Today, social media is no longer just a place to get connected with friends,” Glynn told us. “Almost every day, people fall victim to fraudsters who use fake profiles on platforms like Facebook Marketplace. They trick people into sending money through payment apps or stealing personal information and money by providing too-good-to-be-true offers.”

Chase’s decision to impose restrictions on the types of payments it permits customers to make may rankle some. However, new strategies to prevent payment scams that start on social media wouldn’t be necessary if people used more discretion when interacting with others online. 

But if several of the country’s largest banks — Zelle’s owner banks include Bank of America and Wells Fargo — promote a financial product, consumers can reasonably expect the product to be safe for use, provided they exercise common sense when accessing it.

Chase has issued a series of educational guides through its security portal to improve security for customers who use social media and digital payment tools such as Zelle to make transactions. But educational content loses efficacy if those it’s intended for don’t take time to study and implement its advice.

User education and tighter policies around account-to-account payments may put a dent in criminals’ ability to deceive individuals on social media into sending them money.

But it’s a safe bet that bad actors won’t stop instigating fraud through social media just because some of the largest financial institutions in the U.S. are taking action to mitigate their efforts. 

“I would say that to shut down fraudulent accounts quickly, banks should collaborate strongly with social media companies and law enforcement,” Glynn told us. “Moreover, better verification tools can also be implemented, like confirming payee names before sending money. Finally, striking the right balance between tech upgrades and clearer consumer guidance could create a tighter security net. After all, banks can’t eliminate scams alone.”