Chase Bank has announced that it will start blocking Zelle payments that originate from social media platforms, effective March 23rd, 2025. This move is aimed at preventing scams and fraud, which have been on the rise, particularly on social media marketplaces and messaging apps.

The updated policy states that Chase may "decline or block" payments related to purchases from social media, citing the need to protect customers from fraud and scams. This change comes on the heels of a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) in December, which accuses Zelle and its owner banks, including Chase, Wells Fargo, and Bank of America, of failing to protect consumers from widespread fraud.

According to Chase, 50% of scams reported in the second half of 2024 came from social media. The company warns that Zelle does not offer purchase protection, making it highly unlikely for customers to recover their money in the event of a scam. To mitigate this risk, Chase may request additional information from customers when adding a payment recipient to Zelle, including the purpose of the payment, how they know the recipient, and other details deemed necessary to assess fraud or scam risk.

The move is seen as a response to the growing concern over scams on social media, where fraudsters often use phishing links to obtain sensitive information from unsuspecting victims. In one reported incident, a scammer attempted to obtain a seller's Zelle account details by sending a fake payment through a phishing link. Chase's updated policy aims to prevent such scams by blocking or delaying payments that appear suspicious or originate from social media.

The development also highlights the ongoing issues with Zelle's security and the need for banks to take proactive measures to protect their customers. The CFPB's lawsuit against Zelle and its owner banks alleges that they have failed to implement adequate safeguards to prevent fraud, resulting in significant financial losses for consumers.

As the financial industry continues to grapple with the challenges of online fraud, Chase's decision to block Zelle payments from social media is a step in the right direction. However, it remains to be seen how effective this measure will be in preventing scams and protecting customers. The Verge has reached out to Zelle for comment but has not received a response at the time of writing.

The broader implications of this development are significant, as it underscores the need for financial institutions to prioritize customer security and take proactive measures to prevent fraud. As the digital payment landscape continues to evolve, it is essential for banks and fintech companies to stay ahead of scammers and protect their customers' interests.