Zelle Outage Resolved, Should Users Be Worried?

What happened

Zelle and Bank of America say they have fixed a technical issue that caused reports of missing funds and log-in difficulties. On the morning of Wednesday Jan. 18, users complained on social media that their transfers had disappeared and Downdetector showed a spike in outages. According to NPR, the problem had been fixed by 3 p.m. the same day.

So what

Zelle is a popular payment app that makes it quick and easy to send money to friends and family. It is free to use and integrates with many U.S. banks, including Bank of America. However, as the recent outage highlighted, these systems are not perfect. Not only has Zelle been criticized for not doing enough to prevent fraud, it's not always easy to get answers when things go wrong.

It can be nerve wracking to find money has disappeared from your bank account, and even more so when you call to find out what's going on and can't get through. One user tweeted, "My Zelle transfer from Jan 17th didn't show up on my Bank of America account. What's going on? It was a big amount and I want to know what happened to my money." Other customers reported similar issues. 

According to ABC News, Bank of America did put a warning on its app saying, "Transactions made between January 14 and January 17 may be delayed in occurring and posting to accounts as requested." But customers complained the bank's fraud line was down and many complained they couldn't get reach customer support. 

Now what

If money disappears in any form from your bank account, contact the bank immediately. In this case, the problem was down to a broader technical issue, but it could have been fraud or a banking error. Document what's happened in any way you can -- use screenshots, or download any proofs of transfer or other information. Even if you have to wait a long time to speak to the help desk, the sooner you can log the problem in the system, the better. 

A broader concern about Zelle is that, unlike payments made with, say, a credit card, it doesn't offer fraud protection for buyers. It's one thing if your account was hacked and someone made unauthorized purchases. In this scenario, Zelle says you'd typically be able to get your money back. 

But if you authorize a transaction that turns out to be fraudulent or a scam on Zelle, you're unlikely to be able to recover that money. That's why it's important to only use the app to pay people you know and trust. Moreover, if a seller online wants to be paid by Zelle, be suspicious, especially for a first time payment.

In contrast, credit card issuers are legally required to give fraud protection with only a $50 liability for the customer. Indeed, many top credit cards have zero liability on fraudulent charges. Some apps give customers more protection against fraud as well. Check out our list of top payment apps for more information.