CEDAR RAPIDS, Iowa (KCRG) – The Better Business Bureau said there is a loophole in a federal law called the Electronic Funds Transfer Act, which is stopping people from being able to recover funds lost in scams.
The federal law, which was passed in 1976, can help some scam victims recoup money lost in scam. It can even apply in certain cases where somebody authorized a transfer to a scammer. However, the law doesn’t apply to payment apps like Venmo or Zelle.
The loophole makes it more difficult for people, like Colby Kos, to get repaid after using these apps to pay scammers. Kos said she received text message and a phone call from somebody posing as Wells Fargo. She said the man on the phone told her somebody else was trying to transfer funds out of her account and she needed to send money to a different account using Zelle.
“He was very convincing he knew all the ins and outs and he was sending confirmation numbers to my phone from Zelle somehow,” Kos said.
So, Kos said she sent the account one $1,000 transfer because she was scared somebody else had access to her account. Then, the app stopped her from sending more money to the different account.
“So then, the guy hung up on me and I was like, “Oh no”,” she said.
Wells Fargo, which is Kos’ bank and partially owns Zelle, said it can’t talk about its investigation for privacy reasons and it is continuing its’ investigation. The bank did send a notice to Kos, which was reviewed by i9, that said she did…