Early Warning launches campaign to warn seniors

Dive Brief:

• Zelle parent Early Warning Services and the National Council on Aging are attempting to jump-start a joint effort to reach elderly Americans. The two organizations have created educational videos and other materials regarding scams to educate the seniors population, according to a press release last week.
• The two organizations said they’re distributing the content about business impostor scams, texting messaging scams and online scams through senior centers, community organizations and other programs, per the May 30 press release.
• EWS participated in a council conference last month too, spotlighting such scams, and the organizations are beginning to distribute the education materials this month, an EWS spokesperson said by email.

Dive Insight:

Early Warning Services is targeting this particular Zelle fraud prevention effort at the older U.S. population, as scams plague that generation. In a scam, fraudsters often pretend to be a trusted figure. About a third of people affected by such fraud last year were over the age of 60, the organizations said in the release. It also cited the Federal Trade Commission as saying “older Americans” lost about $1.6 billion last year.

In an interview last month on the sidelines of the Nacha Smarter Faster Payments conference in Miami, EWS Chief Fraud Risk Management Officer Ben Chance talked about acknowledging the demographics of victims in order to better educate them about fraud. An elderly person is more likely to fall prey to an imposter call from the IRS than to an online free Xbox scam, he explained.

“You have to understand the consumer demographics, and what they’re most likely to be a victim of, from a scam perspective,” Chance said during an interview. It’s about “understanding and tailoring consumer education,” he said. “Ultimately, I don’t think any reasonable consumer is aware that fraud and scams exist across payment ecosystems, and to be on the lookout for that,” he added.

Apparently, it’s a long-term battle to reach the elderly population. The council and EWS also partnered last June in a similar effort to help seniors avoid scams, according to a June 2023 press release.

EWS is seeking to better inform seniors about possible scams after its peer-to-peer payment provider Zelle has grown, and attracted increasing scrutiny from lawmakers.

Earlier this year, the company said the Zelle P2P payment tool facilitated nearly three billion transaction last year for businesses and consumers, valued at $806 billion. That was a 28% year-over-year jump for both payment volume and value. Since its launch in 2017, the Zelle network has connected to about 2,100 banks and credit unions, per the press release. 

Meanwhile, lawmakers are paying closer attention to how Zelle handles fraud reimbursements. In February, Democratic U.S. Sens. Elizabeth Warren, Sherrod Brown and Jack Reed wrote a letter to EWS CEO Cameron Fowler requesting the company clarify and streamline its reimbursement policy for defrauded Zelle users.

In addition, the company was the subject of a hearing last week by the Senate Committee on Homeland Security & Governmental Affairs’ Permanent Subcommittee on Investigations last week. At the hearing, the P2P payments provider faced criticism from consumer advocates regarding scams on the network and the company’s reimbursement policy.

“The scale of fraud on the Zelle platform is unacceptably high,” National Consumers League Vice President John Breyault told the subcommittee.

Early Warning Services said it has provided educational resources to roughly 40 million consumers through such partnerships, including with the Better Business Bureau.

“Research shows that when people are exposed to relevant education on financial crime and payments safety, they are significantly less likely to engage with scammers and to lose money,” Andrea Gilman, EWS’s chief marketing officer, said in the release last week.

“In addition to our consumer protection efforts, we are actively working with policymakers and other payment networks to look across the entire ecosystem to truly address the $1 trillion threat of fraud and scams that impacts consumers around the world, whether they pay with crypto, wire transfers, gift cards, or using a peer-to-peer service,” she added.