Chase Bank may restrict Zelle payments to social media contacts due to increase in scams.

The popularity of Zelle, a digital payment app, has led to a notable increase in scams, prompting Chase Bank to implement new restrictions to protect its users. In its policy update, the bank indicated that it may limit payments sent to contacts coming from social networks.

The text of the new policy emphasizes that Zelle should only be used for transactions between friends, family, and trusted individuals, and is not intended for purchasing goods from unknown recipients. Furthermore, it clarifies that the platform should not be used to buy products through retailers or merchants, including those on social media or messaging apps.

This policy change, effective March 23, has raised some uncertainty about the extent of the restrictions. According to Chase's statement, if a payment via Zelle is identified as coming from a social media contact, the bank may decide to delay, deny, or block the transaction. This suggests that while some payments may be hindered, not all will necessarily be affected.

Chase's decision comes several months after the Consumer Financial Protection Bureau (CFPB) announced a $870 million lawsuit against Zelle due to "widespread fraud." According to then-CFPB Director Rohit Chopra, the largest banks in the country felt threatened by alternative payment apps and launched Zelle without implementing adequate safeguards, creating a favorable environment for scammers.