Online financial transactions service provider Zelle is experiencing major issues, according to Twitter users who are reporting thousands of dollars in missing funds and disappearing transactions on the platform.
Downdetector, a website that provides real-time stats about other websites, shows a spike in reports of Zelle outages that began at about 7 am ET Wednesday.
As of about 11 am ET, there were nearly 700 outage reports submitted, with nearly 90% of people reporting issues with fund transfers on the platform. Another 8% of people said that they were having trouble logging in.
A request for comment from Zelle was not immediately returned, but users on Twitter were sounding off about the issue Wednesday morning.
Zelle Users Report Issues
Zelle users took to Twitter to find out what is going on and also to reveal their horror stories to the masses.
People are not happy.
Some users said that they had not been able to get through to Bank of America (BACXL) -- a request from TheStreet for comment from Bank of America was not immediately returned -- while others said they were assured that the funds would be returned today.
People aren't playing about their money on Twitter today.
What Is Zelle?
Zelle is a money transfer platform that is similar to Cash App and Venmo, allowing users to transfer funds directly from or into their bank accounts from other bank accounts.
However, unlike its competitors, Zelle allows the funds to be instantly available for use for free. It's competitors usually charge a fee for that privilege.
The company is owned by Early Warning Services, a fintech company that is owned by a consortium of seven major U.S., banks, including JPMorgan Chase, Bank of America, Capital One, PNC, Truist, U.S. Bank, and Wells Fargo.
Most of the problems seem to be coming from users with Bank of America accounts, based on the social media conversation around the issue.
Early Warning forwarded a request for comment from TheStreet to Bank of America.
Zelle's Recent Growth Has Led to Issues
Zelle has been around for about five years, and it has grown exponentially. The service in now available at more than 1,800 U.S. banks and credit unions, covering about 80% of all U.S. bank accounts.
In 2022, Early Warning said that Zelle was driving transactions at a rate of more than $1.6 billion a day, or $1 million a minute, according to American Banker.
That type of volume was bound to draw fraudsters to the platform and users have had a tough time recovering funds from their banks that they've lost to fraud .
In October, Senator Elizabeth Warren (D-Mass.) published a report detailing how "rampant fraud and theft" on the platform caused users to lose over $90 million in 2020. By the time 2022 ends, that number is slated to rise to $255 million.
On Nov. 28, sources from several banks told the Wall Street Journal that they are working on plans to crack down on fraud and reimburse customers who lost money.
