Bank of America has lost Zelle transfers for many customers | Hacker News Reader

Bank of America has lost Zelle transfers for many customers

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275 pointsndiddy368 comments

I have long been terrified of something shaped a bit like this. Here in the US we already treat most workers like absolute garbage. If one day the Average Joe wakes up and finds that all his money is merely some electronic scribbles in a database which have mysteriously gone missing, the social unrest is probably something that most people on this site couldn't even conceptualize of.

Today it's Zelle, but what happens when you and everyone you know wake up and check your bank account and get an error. Suddenly can't buy food? So on. Sure, they keep backups. You hope. Do they test restoration? What would have to go wrong deep in the depths of a financial system creaking along on 1970s technology in order to really throw a wrench in things?

I work for a bank in the US, and not one of the names you hear associated with scandals all the time. The level of redundancy and HA built into our everything is why our jobs are so boring and slow. We also use a core banking platform that lots of other banks use and it's properly engineered for the kind of enterprise performance we'd all expect. There are certainly problems in banking, but the FDIC protections are also there for consumers. Let's start with a reasonable premise, not a fear-mongering one.

I’ll be the 10th man and add to the nihilism. Consumer protections are there not for the consumer, but to create some sort of artificial social stability through recourse and take the wind out of any social uprising.

I'm confused by your nihilism. If the outcome is that I can get my money back (and I would argue that 250k covers a VAST majority of people, and then some), isn't that a fair trade for me not killing and eating a banker?

True consumer protection would allow people to have immediate remediation (rather than on a weeks-to-months timeline), and also hold the responsible parties accountable beyond a fine that’s a rounding error in terms of profits.

Consumer protections are likely to be 3 months out from the point of impact. As the saying goes, we're all 3 hot meals from the end of society.

You are assuming that the institutions offering the protection will follow through for when you need them to. I don't mind people who do believe these promises made to them, but I certainly understand those who don't.

> The level of redundancy and HA built into our everything is why our jobs are so boring and slow

I have also done this, and I can't say I agree. This is certainly one issue but the real issue is that these companies are not run by tech people. The tech is simply another cost center and gets no vote on how things are run. Many tech firms have equal amounts of redundancy but still manage not to have such terrible software

> these companies are not run by tech people

This is a huge problem, I agree, but it's not why the redundancy and HA get built the way it does. That's still coming from IS in the orgs I've had exposure too. The business side would rather we do things quicker and easier and not put as many technical roadblocks to vendor selection and build roadmaps.

> engineered for the kind of enterprise performance

It took me a while to realize that this is the first time in ages (outside of cringeworthy marketing materials) I’ve seen “enterprise” used as something other than a pejorative!

> one day the Average Joe wakes up and finds that all his money is merely some electronic scribbles in a database which have mysteriously gone missing, the social unrest is probably something that most people on this site couldn't even conceptualize

This overdramatises commonplace clerical errors.

Imagine the horror when the government declares that the physical money you owned will have no value after one month and you have to exchange it for a replacement

https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

It happened in Argentina. One day people woke up and their USD access basically gone.

> happened in Argentina

That’s expropriation, not bank error. And there was very little unrest (EDIT: resulting from the expropriation per se).

If you’re concerned about that risk, an offshore bank account is better protection than physical assets within the expropriating government’s jurisdiction.

>very little unrest

... https://www.theguardian.com/world/2001/dec/20/argentina2

>If you’re concerned about that risk, an offshore bank account is better protection than physical assets within the expropriating government’s jurisdiction.

Due to FATCA Americans are pariahs in the global banking system. For grocery money probably not going to happen.

commonplace??

Isn’t this what happened during the Great Depression? Exactly what you described except instead of “scribbles in a database” it’s people’s physical money in banks. This is literally where the term “bank run” comes from

The depression certainly had unrest, idk how great but it happened in the 1930s so I would expect things would be much worse if something like that were to happen today.

A bank run comes from people running to the bank to withdraw all of their money from their accounts to keep it as cash and essentially bankrupting a bank, causing shockwaves in credit markets.

It's not really the same thing as the money suddenly nullified which I think the original commenter is describing. A better analogy might be to say it's like everyone waking up and seeing their 401k suddenly says 0$.

Different in that that wasn't a case of losing records.

It was the delicately balanced house of cards that is fractional reserve banking all of a sudden crashing down, and pulled back the veil to temporarily reveal to everyone that money isn't real, and even though we remember who all has what, it only works if the masses don't look behind the curtain.

Wouldn't FDIC insurance cover this? For the average person they'd be fine, if they have over 250k in the bank then they aren't the average person

Having worked in many banks ledger systems are extraordinarily redundant. This won’t happen, even in a fight club scenario.

I understand the idea of "if you take everything from someone, what makes them keep to the law", but it's pretty obvious people don't work that way.

There are plenty of scam victims who lose all their savings to individuals or groups. How many of them do you hear of visiting the scammers' office with a pump gun? The sue, they hope for justice, they drink themselves to death, but that's about it. There are some exceptions, but they're super rare.

I mean, people are not robots, but I think it's pretty obvious people do work that way.

Famously, one of the factors in the collapse of the USSR was people realizing society was breaking and starting to work with grey market or criminal groups. You can search for the impact on crime of basically ANY social support program (sanctuary cities[1], substance abuse treatment[2], SNAP[3]) and they all reduce crime.

How people deal with a lack of resources is highly personal. It's true that few of them track down and murder the people who stole from them (it's hard and also most people don't want to kill others). But again, it's extremely well established that people with more going for them commit fewer crimes.

[1] https://www.americanprogress.org/article/the-effects-of-sanc...

[2] https://www.nber.org/papers/w22610

[3] https://direct.mit.edu/rest/article-abstract/101/2/310/58516...

This is intuitive but wrong; the balance of evidence is that poverty does not drive people to crime.

During economic contractions in the west for example, crime does not spike. 2008, or even the great depression: No crime jump.

In the past in the west, when everyone was much poorer (1960's back to 19th century) crime was often substantially lower even than now. We're talking 1930's slums here.

Poverty correlates with crime, but the causation is probably the other way: Crime destroys wealth of a community.

Or it might be a third cause: The kind of people who commit a lot of crime in their community are also the kind who are economically dysfunctional in general and will create poverty for themselves.

It's not that poverty causes all crime. Wealthy people commit different crimes than poor people. [1]

You bring up the 2008 recession, but the poverty rate, rose from ~12% to ~15%[2]. A meaningful but not earth-moving change. Median wages did not decrease [3], suggesting that the rise in poverty would be from job loss, which has not been shown to have a simplistic, direct relationship to crime [4]. The fact that poverty is not the most important factor in crime does not mean it is not a factor.

That is all to say - poverty (and in a wider sense forms of desperation) are not the sole force driving crime, but they are a force for certain crimes. Again, it's very reliable that you can reduce crime with better social support. That's not to say that crime == poverty, just that it's one of many factors that influence people.

[1] https://courses.lumenlearning.com/suny-socialproblems/chapte...

[2] https://www.statista.com/statistics/200463/us-poverty-rate-s...

[3] https://aspe.hhs.gov/sites/default/files/private/pdf/154286/...

[4] https://www.ojp.gov/ncjrs/virtual-library/abstracts/unemploy...

With extreme poverty, you'd probably see some increase in crime. But I doubt you'll see social unrest, unless it's very specific, e.g. you cut off welfare to some ethnic group in the US, and it'll need some level of coordination behind it. I doubt the government will allow that kind of organization for a large scale issue where "the system" is at stake and it's not just some local racial riot.

Have you seen Mr Robot? Something similar happens in the show, good watching for anyone on HN.

I know people working for banks in France and they basically have bugs sometimes where their customers are debited or credited twice. It’s a bunch of legacy xml protocols used for settlements and they sometimes have to pull a bunch of people to manually go through the books and fix mistakes. It’s insane to me that not more has blew up so far. I guess in a way banks truly are decentralized and so one bank fucking up doesn’t necessarily affect other banks.

I saw this happen with my own eyes in 2008 -- the trick was to re-order transactions such that an overdraft is triggered before other small transactions, to rack up overdraft charges.

Secondly, a Wells Fargo in California told a daily customer at the window in a bank "your cash deposit will not be credited until the next day" ..

both of these stories are completely true, at the same time as the Washington Mutual Bank failure.

There was a 1 week time when I had literally 0 to my name because all my money was tied up in bank transfers. It was unnerving.

When zelle first came out, my bank fudged an api call and basically sent my money backwards... which made the transfer crash. Took me a month, they couldn't recover the transfer and just had to credit me the missing cash.

Don't put all your eggs in one basket. Don't daily carry a physical debit card to your largest accounts that could be easily lost or stolen. Take advantage of credit card protections, or cash.

Plopping your life savings in one large savings account has never been a good idea.

> Plopping your life savings in one large savings account has never been a good idea.

Yeah, it should be in a tax advantaged retirement account.

20 years ago I wrote software to automatically scan paper checks, OCR and MICR data, and then do ACH transactions...

After seeing all the problems and insecurity in the banking system I now keep at minimum of 1 month of expenses in hard cash in my safe at all times, and I have multiple accounts at different credit unions, and I stop using banks completely.

I think about this too, but I'm not terrified, I'm excited.

What a great opportunity it would be to build something new based on things we actually value and not on threats made by dead men:

> This gold thing with my face on it is more valuable than other gold things without my face, and if you disagree I'll kill you.

-- Julius Caesar

... and we've been following that pattern ever since.

I get your point but I trust 1970s tech a bit more than modern tech.

Sounds like Blade Runner 2049 is predictive programming.

This is literally the plot of Mr. Robot.

If you have enough money in the bank to buy groceries you have enough money to take out of the bank and put in your mattress for groceries.

Also HN will probably get upset for me saying this but a few grams of gold or silver or other goods easily tradeable like whiskey or ammo never hurt anybody and might buy you a pig to slaughter or something.

> few grams of gold or silver

I remember, a few years ago, Cupertino being targeted for burglaries because the Indian and Taiwanese immigrant populations had a penchant for storing wealth in gold and silver and cash under the mattress, respectively. The victims’ recovery rates and timelines were far poorer than these BofA customers’ will be.

That happens a lot in many segments of the population. When my uncle was detective, there were similar incidents among the orthodox Jewish community, as the cultural preference from the diamond trade was instant settlement. It’s also easier to move gold across borders. Many folks were hesitant to call the police which made it worse.

Prepper people get targeted alot as well. One dude in my hometown was a victim of a home invasion, held hostage and lost about $250k of guns, ammo and silver. You don’t hear alot of about this stuff because typically these communities are not exactly following the letter of the law from a tax perspective.

He could have prepared better.

Which is an interesting comparison because these are not the only immigrant populations that do this, there are large groups of immigrant populations in Texas who are largely unbanked or underbanked or have cultural penchants for using gold and silver as stores of value, but there has been no concerted effort to burglarize them, because strings of home invasions in Texas usually end up with the home invaders in a body bag regardless of who they decide to target.

Can you help my understand why this article cites a higher per capita burglary rate in Texas than California (it claims the data is from the FBI)? https://www.thezebra.com/resources/research/burglary-statist...

Why does Texas has so many reported burglaries though?

https://www.statista.com/statistics/232539/burglaries-report...

This is false.

Texas and California are roughly tied in burglaries per capita, 370.7 and 369.7 per 100,000. New Mexico has the most, at 648.8/100,000. (https://www.statista.com/statistics/232580/burglary-rate-in-...) Interestingly, New Mexico has a bit more than three times as many guns per capita as Texas. (https://www.statista.com/chart/21894/firearms-in-each-state/)

Property crime rates are going to be suppressed in Texas among the (undocumented) immigrant population because of a justifiable lack of trust between them and police. (https://onlinelibrary.wiley.com/doi/full/10.1002/pam.22221) The NCVS should give better data, but I'm damned if I can find it.

The recovery rates and timelines are only relevant for the cost. The key part is that its failure is uncorrelated with bank failure. It's not either/or, but rather multi-source redundancy.

I've been saying this for a long time: https://sneak.berlin/20191119/your-money-isnt-yours/

Cash isn't illegal yet. Use it.

Don't use any one system exclusively. Even if you rely wholly on your normal person checking account and electronic payments, have a few grand stashed away in your house in cash. Sometimes the lights go out, and ATMs with them.

hey, this is pretty neat to see a word count summary up front

> ( 2341 words, approximately 13 minutes reading time. )

I'd love to see that in every article and perhaps have some css setting that I could globally twiddle for every website so folks could opt in or out as they please. I suppose an extension could possibly tackle it too if the semantics are correct on the page.

Firefox reader view gives a reading time estimate.

You're responding to a concern about society with a suggestion for individuals. It may be good advice for individuals, but do you think most people are going to follow it?

Great response - even if I can buy a pig with bullets it doesn't help anything else. That assumes you can butcher and store the meat. This seems like a kind of bikeshedding argument - the bike shed is built so don't worry about the actual nuclear reactor, you can always just hide in the bike shed. Doesn't matter how well built the bike shed is - you're still surrounded by nuclear fallout

People have no trouble conceptualizing insurance. We have car insurance, home-owners insurance, life insurance, etc.

But what about "every day life" insurance? It doesn't take much cash on hand or some staples in the cupboard to protect against a wide variety of temporary "glitches" in life. Glitches can be anything from surprise weather events to things like your bank accounts becoming temporarily unavailable.

Importantly, insurance is not an investment we intend to get a return on. It's a cost.

Heh, I didn’t even notice the covid paper products shortage on accounts of having every day life insurance in the form of a Costco membership and having bought toilet paper some months before. Buying in bulk isn’t even a cost, the cost of capital sitting idle in the form of a shelf of stuff I won’t need for a long time is more than made up for with the volume discount.

Not only are the bulk beans a tiny fraction of the cost per bean, they’re fresher and higher quality.

Also it is an investment that returns in time savings. Buying 50 rolls of TP takes the same amount of time as buying 1.

The problem with buying in bulk is that it requires the money up-front and that works only if you can save enough money at least once. Poor people can be permanently cash-strapped, so they never manage to get to the point for that upfront investment.

Same here, we try and keep 3 months supply of groceries on hand from costco at all times. Once a month we look through what won't last 3 more months and stock up, and once you actually figure out what you need it's surprisingly cheap. For example we skipped our December trip because of the holidays and so spent around $1100 for our family of six. Which sounds like a lot but when you stretch it out over 2 or 3 months that less than $100 a person. I'd recommend everyone who can does this.

This only works if you don't live in a dense city. People in cities simply don't have space to store (many) bulk purchases, and the stores near them (i.e. that don't need a car) don't sell things in bulk (transporting bulk items by public transport is not feasible, and it's too expensive by Uber).

When I visit friends who live in dense cities they are very excited that I have a car, and often ask me to take them to make some bulk purchases.

I always figured the cost of the additional square footage in a home per property tax etc was part of the equation. There's some cost for additional size usually. But if you're already paying that cost better to get some use out of it in the form of bulk storage for sure. I suppose there's a freedom to store in having that space. I like the time saving angle, I was looking at old receipts last month and am always stunned by the slice of life they capture. I had transactions where I'd go buy filtered water. Since buying a RO device I never had to haul water any longer. Such a different time of life, definitely saving time there.

I was right there with you. Dealing with the deliberately obfuscated price/sizes of TP/PT bothers me, so my life is much improved if I only do it ~once per year. And paper products are exactly the type of thing you can easily put on the top shelf of a closet and stack to the ceiling.

In the event that you are trading gold and silver and ammo, your first problem will be holding onto your gold and ammo in the first place. Which means if you are prepping for this scenario, your first order of business is to be part of a tribe willing and able to defend you.

This is why I believe leadership in urban environments would quickly turn over to existing city gangs in a collapse scenario. Maybe the police would be one gang that controls a fraction of the city.

Urban gangs already have the required tribal associations, intimate understanding of the terrain and resources therein, and the propensity to commit violence that would be required to take control.

Any of us good citizens who keep our heads down, go to work, avoid violence at all costs, and individually prep for a collapse without building existing association to a coherent tribe will end up quickly dead or subservient to these existing tribes.

The question is, in total societal collapse situation do you want to live? I am not sure I would want to.

If we're in a situation where society devolves to the point where people have to trade whisky or ammo for a pig to eat then half of us are going to end up murdered for anything valuable to begin with.

If it gets to that point we're (or at least a non-trivial fraction of us) gonna end up murdered not because people want what we have but because by the time things fall apart like that people will hate us and want us dead.

French revolution, Russian revolution, Europe's religious wars during/after the reformation, etc, the professional classes of people who built and maintained "the system" don't tend to do to well at the hands of everyone else when it finally keels over.

Slaughtering a pig isn't some trivial process, it requires skill and equipment that most people lack. But even if it was doable and a person trades their emergency gold for a couple weeks of food, then what? Any disaster that reduces society to pig bartering isn't likely to be fixed in a short amount of time.

A month or so of salary in cash at home, and some "hard assets" is a good hedge.

As some other replies have said - the best and most reasonable hedge is to rely on your community and have good bonds there. Doesn't matter how much cash you have if people don't care about that anymore, the best option is to have social bonds and have a community to support you, no person is an island etc

$100 under your mattress for the future is not worth nearly as much as giving that money to a friend to help them cover rent today

Under what situation could that possibly be useful where all society hasn't collapsed?

You're not going to lose access to your bank account because the bank failed; the FDIC handles that. It just moves to a different bank over the weekend.

Locked out because Chexsystems thinks you're a financial criminal is more in the direction of possible.

I've had banks go technologically tits up and render my funds inaccessible for multiple days in the past. Card payments fucked, etc.

Has happened to more than one bank I've used, in more than one country.

I've also had a bank freeze my account temporarily (for over a week) because some risk algorithm somewhere thought fraud was occurring.

All those times, having a bunch of cash handy was very useful.

As for hard assets: they make a decent hedge against financial shithousery.

> Under what situation could that possibly be useful where all society hasn't collapsed?

In a natural disaster type situation it could easily be the difference between being able to get what you need stay put the whole time or running out of some supply you didn't think you'd need and having to evacuate half way through the follow-on mess and losing quite a bit to looters and/or the environment.

The other person who replied mentioned more mundane stuff.

Bitcoin fixes this

No, it doesn't. They can go missing, too.

https://www.businessinsider.com/james-howells-threw-away-bit...

> James Howells is known as the man who accidentally threw away 8,000 bitcoins. Now he has an $11 million master plan to get them back.

Bitcoin has a transaction throughput of 1 KB/s (less than a 28.8 modem) for the entire world.

https://bitinfocharts.com/comparison/size-btc.html#1y

It's curious to me that this is downvoted, I am practically a crypto evangelist and have been since the beginning but even I acknowledge that the BTC network's capacity is extremely, extremely low. It's not suitable as a world-wide transaction engine, not even for relatively infrequent transaction types like store of value accounts that don't move around. There have been some half-hearted attempts to fix this (lightning network for example) but nothing that actually provides substantial throughput. Bitcoin Cash was an attempt to improve it incrementally but that was pretty solidly rejected by the community (and wouldn't have really solved the problem anyhow)

I think it's fair to say BTC has a capacity problem, and it's not just a technical one - it's also a cultural aversion to change in the base protocol and cultural aversion to extension of the base protocol to allow additional abstraction layers that could solve the problem.

In what way does Lightning not solve the problem?

Stop using facts, math, information theory, and other malarkey when discussing crypto. They are all clearly not important to the goal of pumping and dumping. Thanks.

By putting the onus on the user to maintain access and security rather than the bank?

By making the loss irreversible.

I trust my ability to keep a small file (or more realistically: 24 random words that can be committed to memory with some effort) secure more than I trust any corporate entity that treats the penalties for screwing their customers as a mere cost of doing business.

Crypto has many failure cases but a generalized loss of all transfers for all wallets is simply not one of them.

Does this work for your average hospitality worker, or is it really only a solution for the techno elite?

In every institution I’ve worked at if you do something that accumulates fines you and your management get fired. Since it’s a small street, you also effectively get blacklisted. They’re also highly influenced by their credit rating and credit spreads for day to day operational financing, which negative reputational events directly impact. Boards are also really unhappy with these situations and C level folks are often fired. I think you understate the consequences, even if the bank itself can afford to pay the fines.

This isn't a defense of the corporate banking structure.

The cognitive load necessary to grok crypto currencies doesn't displace that which is required to utilize existing financial solutions, it's just adds to it. It's also less forgiving and has fewer safe guards or regulations.

For most people, crypto is just an added layer of obfuscation and complexity with some speculative gambling sprinkled on top. It benefits few and only when utilized by many.

It's like cash, if cash were a bar of wet soap you had to hold onto while riding a roller coaster in the rain.

By aligning the interests of the custodian and beneficiary.

Money loss of this kind does not happen because the interest of the custodian is misaligned. The bank does not make a profit if your money goes missing.

Technical errors can happen regardless of what the custodian wants

Yes, rather than a bank that loses zelle transfers.

I have five people in my household. Only one of them, not myself, doesn’t regularly loose important stuff. We are super adept at key replacement, Drivers License replacement, passport replacement, debit card replacement, etc. I travel with two phones, two laptops, and two kindles.

At this point if I haven’t lost my debit card in six months, I will just report it lost to change the numbers.

I have worked at financial institutions; while they are not infallible, they are all better at this stuff than my family, and usually work in teams for important stuff.

Zelle transfers into an institutionally insured checking/savings account at a major financial institution are pretty safe and people will get their money back. Zelle transfers from non-BoA accounts will have the records at the other banks to prove the transfers existed and they can be recovered that way. If BoA really lost the records and don't have backups and people lost transfers from BoA to BoA accounts and neither BoA account has a record of the transaction, it will just be a hassle for customers probably having to fill out some forms and wait a while.

I got scammed by a Zelle transfer when someone used my phone (without my authorization). I didn't even know I had Zelle but it's built into the BofA app. I lost $3,000. BofA refused to refund any of the transfer or reverse it. Total trash feature. I didn't sign up for it. I don't want it. BofA signed me up for it. I'm changing banks because of it.

My girlfriend also lost 3000. Somehow money was sent from her phone to someone in Texas. We contacted chase and they said "you did it" so no refunds. But we didn't! She works from home and there is no other IP other than her phone in her Chase account. So how did this happen? We filed a complaint with the Police and tried to figure out what we can do through other channels. Turns out nobody cares!

You should recognize the possibility that she was scammed, did authorize the payment and is now embarrassed or in denial about it.

take them to small claims court

You let someone use your phone and they were able to open BoA app and transfer funds without your knowledge? I don't fault BoA for ignoring your claim, that's like handing someone a credit card and acting surprised when they use it and wanting the CC company to refund your money.

If you let someone into your house to use the bathroom it's not OK that they rifle through your dresser drawers and take any cash that they find.

People "hand someone their credit card" every day at restaurants. That doesn't mean that they are waiving fraud protections.

Just as a aside : the US is the only country I’ve been where the relationship with credit card is so … relaxed.

My first week here, my conclusion was that people must be either really honest, and that you get refunded routinely.

Refunded routinely is the answer btw

I've been living here 7 years now, I still have to get my credit card abused.

What I had in mind is situation where the bar tender has 20+ credit card behind the counters.

I'd say the vast majority is incredibly honest.

It’s also not the toilet companies job to resolve that is it?

If the toilet automatically signed me up for a service that would dispatch little robots to collect all my spare cash and deposit into a bank account when someone sat on it and asked it to I might have some pointed questions for the toilet company.

What 'toilet company' has an analogous service relationship like a bank does to their customer and would be in a position to resolve it?

In the other example they gave, you would expect the credit card company to work with you to resolve the fraud. Similarly, if a stolen vehicle gets tickets, you don't expect to have to pay them and then try to collect from the thief.

If a scammer gets your CC number (in meatspace or online) and makes fraudulent purchases you can dispute them and get the charges reversed, so maybe not the best example.

It's the perfect example.

The banking consortium invested in Zelle to put pressure on Visa and Mastercard raising fees; but this is a perfect example of how the banks product isn' as time tested or consumer protecting as credit cards (with US financial regulation)

Not sure about the US, but in Europe they would actually refund me if my CC was stolen. It's part of my standard insurance package.

US credit card protections are better than Europe's.

Debit cards are somewhat less protected than credit though.

Yes I thought so. This sounded really weird.

You're right about the debit cards. But "premium" accounts offered by banks often have insurance for these too (you get that for free if you make around 2x average wage).

Insurance for what? You don't get insurance for someone writing a check against your account or making a debit using your pin. Similarly, you don't get insurance for a Zelle transfer from your mobile because you gave it to someone else.

How did they get access to the bank app on your phone?

If you close the BofA app after you are done, you have to log in again with either password or biometrics. If you don't and just go to the home screen, it stays logged in.

It might leave you logged in for a short period of time (in case you are planning to back to the app), but it logs you out relatively quickly even if you do not “close” the app.

In that case I’d argue the issue here is terrible security in BofA’s mobile app, not the kind of money transfer.

This seems like a remarkable oversite on BofA's part. I'm with a comparitively tiny US credit union, and even their app demands a pin code to return to it if I switch to another app mid-session.

take them to small claims court, $25 to file online. It costs them money to respond otherwise you get a summary judgment in your favor. Only way to get them to change is to flood them with costly procedures.

https://www.consumerfinance.gov/complaint/

Well, someone stealing from your bank account would be more of a law enforcement issue I guess.

The magic words are “Reg E”. Your bank won’t tell you about it, but they must follow the regulation.

https://www.federalreserve.gov/boarddocs/supmanual/cch/efta....

I'm not familiar with this and therefore not sure if this is the correct source but I tried to find something official.

File a complaints with regulators including the FDIC and Federal Reserve.

I don't understand why overdraft hasn't been outlawed. It's literally a tax on you if you make one tiny mistake or your bank make a mistake.

If I dont have the money block the transaction and offer a line of credit with specific apr for those that want to be able to overdraft.

> I don't understand why overdraft hasn't been outlawed.

It's a felony to write a check that you don't have the funds for.

Oh, you mean for the bank.

I can't tell if you're defending overdraft.

Banks see it as a source of revenue. I don't have sources, but I recall stories where debit transactions were processed out of chronological order and caused overdrafts which then kicked off hefty fees for overdrafts of something like a dollar.

Having a bank service break and causing your funds to be unavailable, or having negligent processing that can't keep up with modern banking, is much different than passing hot checks.

Do checks still exist in the US?

Edit: Here in Europe no one uses checks since I can remember (since the 80s?). In Switzerland lots of cash and direct bank transfers.

You generally can't pay rent in cash, and the last place I lived wanted $20(!!!!!) in service fees to pay online through _any_ means. They got a hand-delivered check each month.

So yeah, they're pretty common here still, mostly in businesses that haven't kept up with the times.

Not sure if sarcastic, but:

Yes, definitely! Not that common, but sometimes useful for big in-person purchases or down payments. I have needed to write one maybe once in the last five years. Banking apps let you deposit by taking a picture.

But I’ve received a few checks as gifts or payment.

Yeah, I just got paid with one the other week. It was the easiest way to take money when the person has no tech savvy (and can't figure out how to send an ACH)

Last year, my first month salary in the US came in the form of a check, since I didn't have my bank account ready at the time. So yeah checks are still common.

> Do checks still exist in the US?

Of course. I was stuck behind an older lady writing one for groceries, just the other day.

Same. It seemed ridiculous. The whole process of writing a check and having the cashier do special things because of that is so arcane at this point. Plus the lady missed out on a good dollar or two of cash back if she were to have used a credit card! She was old but not THAT old.

That's fairly common, most banks have "overdraft protection" that works exactly how you described.

It is not exactly the same thing. The commenter you are responding to is looking to avoid overdraft, not having an insurance on overdraft.

I'd agree with the idea of avoiding overdraft entirely unless a customer signs up for it. I don't want transactions I can't afford to go through. I manage my accounts quite closely. For me such situation would be 99% an unintended transaction that I would like to cancel.

By letting such requests go through, banks put the burden on the customers to clean up after a wrong or, in many cases, illegal transaction.

YMMV.

Overdrafting IS opt-in.

I had a bank charge me an overdraft fee. I asked them to show me my overdraft authorization.

It's amazing how fast a bank can return money when they screw up.

I turned overdraft coverage off at my bank. You can turn it on and off on-demand through their website. If your bank won't let you do this, consider another bank.

I've used a credit union my whole adult life and they did't offer overdraft as an option.

That's because it was automatically enabled by default. This is what banks would do if they weren't predatory.

Then they charge $30 to reject the transaction, another $30 when you go "odd and try to swipe again", then extra money because you didn't have the $30 to cover the fee in your account, then recursively until you're $1200 in the hole and they're refusing to cover it.

Correct. I called my bank and had them enable this for my debit card. They made sure to clarify that ACH transactions will still go through, however.

More than likely those weren't overdraft protection since i think are only opt-in now. There are fees for having a negative balance which is outside of overdraft protection. There is no way to prevent an account from going negative like with ACH reversal.

Does anyone have context of the content as the original post is gone from Reddit?

Also on my BoA App, I have the notification:

> Please Note: Zelle transactions made between and January 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay or inconvenience.

Not to discount the stress that it induces, and our expectations as customers, but hopefully it's a blimp in their servers.

Correct text, copied from BoA web site: Please note: Zelle® transactions made between January 14 and January 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay or inconvenience.

Phone support: "Due to extenuating circumstances, we are not able to take your call at this time."

"Delayed" and "get undone, leaving negative balances" aren't the same, though. The first is annoying; the second is terrifying.

First we got bugs in our servers, now we need to learn to deblimp them? This field evolves too quickly

ah yes, the "hindenbug"

Small nit, it's "blip" not "blimp" (which is a dirigible)

https://www.reveddit.com/v/personalfinance/comments/10f8042/...

Interesting. I don't agree with the concept of 'cashless' society. This is no paranoia, conspiracy theory. I don't know if this is the first time this happens but this is one to many times for most people.

The healthy thing is to have multiple options ranging from cash, credit/debit cards, up to apps with NFC payments, etc...

There has to be a limit on how much tech is too much. This goes for every human facet (medicine, law, etc).

Sorry for ranting about it.

HN likes to trash Bitcoin, but at least you can understand where the pro-Bitcoin folks are coming from. If a cashless society is inevitable, would you prefer that all such transactions be mediated by a small number of large corporations? Or would you prefer the option of at least some of your transactions happening through a peer-to-peer system that no corporation or government controls?

Bitcoin doesn't have an undo button. I know somebody who works cybercrime and they routinely get people their money back after being scammed. If they were scammed into using bitcoin that money is gone.

Some of us would much rather take a tiny chance at being "scammed" than the certainty of being at the mercy of the government, the banks and the payment processors. In an ideal world, both of these choices would be available to adults to manage their risks and their own finances as they saw fit, rather than being forced into the latter system "for their own good".

Much less digital money is lost than real money.

And when digital money is lost due to fraud or error it can be restored.

For example, in 30 years of banking I have lost $0.00 in digital money. Sure, there have been gas station skimmers, system outages, misplaced debit cards, but I haven't "lost" a single cent.

I have lost at least $20.00 in real physical money.

$0.00 < $20.00

Digitalization helps other things too, I've lost hundreds of dollars in misplaced transit cards. Back in the 90s when I was a broke punk some loser stole a transit card with ~$47 on it. That was (and is) a big deal. Others have been misplaced or damaged beyond hope.

Since digital transit cards became a thing I have lost $0.00 in transit funds.

When my older relatives wanted to send money to family/friends, I used to recommend Zelle, which was better than the never-heard-of-it apps they were considering. But with all the problems I keep hearing about Zelle, they're off the list. Most of them have iPhones and so I just tell them to send cash via Messages/Apple Cash. I don't know how reversible that sort of thing is, in the case of fraud, but as long as they can see the messaging history with the person before they send it, it seems like that's a pretty low risk.

Any other suggestions for older adults?

I no longer recommend Cash App (formerly Square Cash) because they explicitly removed the ability to have inbound transactions be automatically deposited into your bank account.

They left it on for anyone who already had it on, but I specifically signed my dad up on the assumption that sending him money would be as frictionless as possible. Instead, Square/Block would love for that money to stay in the Cash App account, not actually available for him to spend in his own account.

I continue to use Cash App because I continue to have this feature; if they ever remove it, I'm gone.

I got burned by the Cash app as well, with bait-and-switch tactics around their merchant discounts. Their system had problems registering merchants correctly, so the discounts pretty much never went through for me. I tried to get support but they didn't care. I bounced.

I don't actually blame them for this, because they have to make money somehow. If they make money by having your money in your account for a few hours/days, idc.

So long as they make it frictionless to start a withdrawal - a tap or two, that's all I ask.

I do blame them for this - they can get fucked.

For my dad, Auto Cash Out was exactly the "frictionless" experience he needed, and he didn't need any of the BS Cash App wants to put in front of him.

I'm happy to help Square/Block make money with my engagement/interaction with Cash App, but they clearly can't figure it out without severely harming the UX in the process.

Therefore, they aren't recommended.

Brit here- I usually send money to friends and family using bank transfers with internet banking- it’s instant, there’s no fee (AFAIK) and all you need are someone’s account number, and sort code, which everyone has.

Is this just not an option in the states? It’s insane to me that y’all use (need??) third party apps for something as simple as sending money around.

Zelle is basically the US attempt at instant bank transfers. You can set it up and use it through your participating bank's app or through their online portal.

> Is this just not an option in the states?

They are working on it: https://www.frbservices.org/financial-services/fednow/about.... should be available this year. Once it's up Zelle, Cashapp, etc will not be needed anymore.

I believe FedNow is the US implementation of FasterPayments which we have had here in the UK since 2008, and what the parent is referring to.

https://en.m.wikipedia.org/wiki/Faster_Payments

FedNow is no different from Zelle; it seems to me banks could still mess it up, and most of the complaints here (that you can't reverse a transaction you sent) would still apply to it, since that's kind of the point.

I would wait and see. It's not like they're ignoring fraud management:

https://www.pymnts.com/news/payment-methods/2022/fednow-pilo...

"FedNow Service features will help participating financial institutions conduct investigations and provide returned funds connected to fraud and errors. Beyond mitigating fraud through the design of the service, Stanescu noted that the Fed is exploring opportunities to collaborate with the industry on consumer education and outreach programs to help identify and prevent scams and promote strong enrollment and authentication processes. In the meantime, the value proposition inherent in irrevocability remains intact: receivers have protection and a guarantee that good funds have hit their account and can be used immediately."

I disagree - it seems a lot more like SEPA in Europe. The non-reversibility seems similar to SEPA fast transactions (ie, similar to fedwire) as well.

The fact that they're using ISO20222 is also a clue that they're probably picking up best-practice from European and Asian networks.

My biggest complaint with Zelle is my bank helps me by including Zelle in my bank account with easy setup. Some banks it's just included. I'd like a hard lock out on it.

Wow this is the first I've seen of this, amazing it hasn't come across my radar. Seems like a major consolidation, tied closely to a government institution (or whatever the FRB technically is).

Can you explain what you mean by consolidation? It's essentially a standards-based collaborative approach not unlike other large payment networks like in the UK, Europe and India.

Apologies for the armchair commentary. "Consolidation" meaning commerce regulation and oversight more tightly consolidated than possible with technology (including paper notes) currently used.

> ...standards-based collaborative approach...

You have not said this explicitly, but for myself it is notable that this is not peer-to-peer, with both parties collaborating based on a standard. Instead it is clearinghouse. Unlike peer-to-peer standards, this would give the Fed Reserve at least a large dataset or at most a large control lever. From the linked article:

> Through financial institutions participating in the FedNow Service... > Consistent with the Federal Reserve’s historical role of providing payment services...

> Is this just not an option in the states?

Correct.

We also still use paper checks fairly extensively, and chip/NFC cards are a recent advancement.

There are a few bank-to-bank mechanisms (ACH, wire transfers) but they're slow (often multiple business days) and often have fees associated with them ($20+ for wires).

The lack of good transfer mechanisms is what has led to a proliferation of alternatives (e.g. Venmo, Cash App). Zelle has emerged as a bank-approved mechanism for "instant" funds transfer.

Zelle, what they're complaining about here, is that. It's not a third party app.

In the USA, sending a wire transfer is usually $15-$20, and some banks charge $20 to receive a wire transfer.

> sending a wire transfer is usually $15-$20

Will note that there are banks that offer sending and receiving wires for free.

Wow, did not realize that banks also charge for receiving incoming wires, but most of the big guys charge around $15: https://www.nerdwallet.com/article/banking/wire-transfers-wh...

And an additional fee it's it's 'overnight' and another fee if it's international.

Then they do a three-way call between the parties and the banks to verify the transaction.

Sending an ACH is nearly free, banks just don't expose it because of the very poor experience when you get one of the numbers wrong. You can ACH people all day with Transferwise.

FedNow is scheduled to come this year and provide instant money transfer. We already have delayed money transfer services run by the government.

Zelle is just a private sector solution since the government hadn't built it out yet.

This is possible if both people use the same bank (Bank of America, Wells Fargo, Chase), but even with the relatively consolidated finance sector, the odds of this are not super high.

Yeah, the USA is way behind many other nations here. Exercise left for reader as to why.

It wont be a popular answer here but Facebook Pay now Meta Pay is a great product. It is instant, as in, you can send someone standing in front of an ATM money, and they can pull the money out seconds later. Not pending, but completed deposits. For free.

It is the "it just works" way to move money between peoples debit cards in the US. It is rock solid, a large network of us use it all the time, and it is significantly more frictionless than Paypal/Venmo/Cashapp/Zelle when you already talk on Messenger. 4 clicks and the money appears.

Oh that's pretty cool. It looks like there are no fees for the service (at least for now), where Venmo has a 1.75% fee ($0.25 min $25 max) and Cash App has a 0.5%-1.75% fee ($0.25 min) for the same instant withdrawal service.

It also doesn't require the banks cooperation, and has pretty high limits at 10k per transaction, and per month. Basically facebook fronting money because it believes it can trust the profile.

I suspect the personal side of it will remain free. It's a gateway drug to having your card on file. Then there is less friction when you see something on marketplace you want. They can recover money on the marketplace side of things.

The bank does need to cooperate to accept the transaction "instantly", but mostly they do since it's good for them.

Does Meta Pay have a checking account as part of each account that you can withdraw from directly via an ATM? Or does Meta Pay need to transfer the money into a 3rd party checking account that you can then withdraw from? That second step may not be instantaneous, depending on which bank the account is at.

there's no account. its just your checking account. and their checking account.

facebook fronts the money, deposits it as a non pending transaction. then it takes your money.

ive done it with multiple people at multiple banks. its never been more than minutes.

Good to know, that is pretty useful for immediate transfers. I've done transfers between accounts at the same bank before, using their own website, and it still takes like 24 hours to leave 'pending' state.

PayPal/Venmo/Apple Cash also support instant transfers through this method - basically it just charges a negative amount to your debit card. It's not always free though, and most people don't actually need "instant" unless they're standing in front of an ATM.

is it free anywhere else?

Most other countries, sure. I don't know how their other fraudoffs like fraud protection work.

same minute banking transactions between checking accounts are free in most countries?

I heard the feds are working on a similar system called fednow:

https://www.federalreserve.gov/paymentsystems/fednow_about.h...

I've never recommended Zelle. Tales of their complete lack of customer service, consumer protection, and unwillingness to be held accountable are not new. ACH is archaic (and has its own dangers e.g. pull transactions) but it generally works.

> and unwillingness to be held accountable

I believe that one of the design considerations between the banks that developed Zelle was specifically to move more liability to the customer for fraudulent transactions.

Consumers can't initiate ACHes so it doesn't compete with Venmo/Zelle/etc.

False. Every time you transfer money from an account at one bank to another you're using ACH. Same with moving funds from banks to stock brokers or brokers to banks.

The real reason it doesn't compete is its slow, and many banks have terms of service that say something like "You can only set it up between accounts you own" so sending to other people is often technically a violation of your agreement with a bank.

Some banks don't have a way for a customer to initiate an ACH, unless maybe calling them. Nothing in their app or website for it.

I use Google Pay with my wife and it works great. Never had an issue.

I guess I'll be the lone voice in the wilderness. We've been perfectly happy with Zelle.

We use it a couple times a month to pay service providers, send money to family. Never had any issues with it, don't need an "app" for it, works with our normal bank stuff.

Similarly, at the same time, we got a check recently from a settlement. We plonked it into our account, and it bounced. It was a large settlement (i.e. lots of people), and the law firm in charge of writing the checks messed up, and thus canceled all of checks and re-issued them a couple weeks later. It was a big deal. Stuff happens.

Hopefully BofA owns up and refunds all of the overdraft problems, but they can't roll it all back. Bouncing checks have repercussions out of the banks control (landlords tend to frown on bounced checks, for example), which behooves them to be more diligent about things like this that can impact that.

The big problem is that people are out of the loop for things like this. Computer pulls the money back, computer bounces the check, computer notes the bounced check, computer tells the other computer you bounced a check, computer craters your credit rating. There are no "people" involved in this, it's all procedures and rules and such encoding is the "logic" of one of the most inscrutable creations man has ever created -- the computer. And people have to scurry about to compensate for the vast ripple effects these things can have that impact peoples lives.

So, hopefully BofA cleans up their end, but more importantly, hopefully everyone down stream is patient with those affected and helps them recover as well. And, finally, no doubt a legion of scammers will crawl out of the wood work leveraging this event to gain some advantage. Way of the world.

You are happy because you have not seen how much better things can be. Zelle is very poorly designed. It is possible to send money to numbers which do not exist. Even if the number does exist, you have no way of knowing whether the person you are sending to is correct or not, since you enter their name information yourself, instead of zelle fetching this and asking you to confirm it.

> pay service providers, send money to family

how does the recipient of a zelle transaction know if it’s tax worthy (aka needs to go on 1099) or just sending money to family? i don’t see a way to “tag”/“flag” transactions

same goes for cashapp

I would assume the recipient would know if they exchanged a good or service to be taxed. Usually family members know they are family members.

this is a feature, not a bug

> Zelle® does not impose taxes on transactions made on its network. If payments you receive on the Zelle Network® are taxable, it is your responsibility to report them to the IRS. If you have any questions about your tax obligations, please consult with a tax professional.

Got it.

Zelle is the choice of scammers. Incidentally, Zelle offers no guarantees or refunds. I don't know why anyone would use Zelle under those circumstances. Some banks will automagically sign their customers up for Zelle accounts, exposing them to scam risks for which there is no resolution. Money gone.

IMO, the risk is pretty minimal. Zelle isn’t a 3rd party payment platform — it’s a feature/standard a bank implements to give you instant peer-to-peer bank transfers. Zelle the company is owned by the banks, including Bank of America.

So this is just BoA adding a feature they partly created to their banking suite. That in itself isn’t a red flag.

Zelle itself is also secure. You have to be fully logged into your bank account to use it! So it’s as secure as any banking service.

The reason someone would use Zelle is p2p bank transfers between people you know. Like if your friend wrote you a check to cover their half of a hotel on a vacation. Just replace that with Zelle. It’s better than, say, Venmo because it goes directly between bank accounts immediately, without the intermediate third party and waiting 3 days for Venmo to give you your money.

The only risk you’re exposed to is if you blindly send money to someone you don’t know, which you shouldn’t be doing on most platforms. (For example, you only really get buyer protection using goods and services type transfers on other payment apps, which have extra transaction fees.)

I think the end line is that banks should have better fraud protection for bank accounts. Including debit cards, ACH, checks, and Zelle. I supposed my summary is that Zelle isn’t really unique. It’s just faster bank transfers

> Zelle itself is also secure.

Zelle has been subject to tens of thousands of scams. If it's so secure, why doesn't Zelle have any guarantees? If money ever goes out, it will never come back, unlike competitors such as PayPal which have a successful refund process.

The argument is that Zelle helps you hand your friend a $20 and is secure in that context. If you use it out of that context you are using it “incorrectly”.

Yup, this happened to me. I didn't sign up for Zelle. Didn't know I even had it. I lost $3,000 and BofA refused to reverse or refund any of the charges. Total BS.

But how? How did a scammer log into your account in order to set up a transfer?

Whether or not they accept fraud claims isn't up to them, it's up to banking regulators.

https://www.wsj.com/articles/jpmorgan-other-banks-in-talks-t...

"Zelle transactions made between Jan 14 and Jan 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay and inconvenience"

That's what Bank of America says on the mobile app. I sent a couple of Zelle payments on Jan 15 and Jan 17. They payment I sent on Jan 15 is missing on my side.

EDIT: an hour later, BofA fixed my Zelle Jan 15 transaction.

Bank of America is a consistently terrible company. They're like the financial LastPass - avoid if at all possible.

archive (kind of) https://www.unddit.com/r/personalfinance/comments/10f8042/ba...

One of the reddit comments says:

> Zelle isn't problematic if you use it for its intended purpose and don't send money to complete strangers

Why does it matter whether you're acquainted with the recipient?

> Why does it matter whether you're acquainted with the recipient?

Because the transfers can't be canceled/reversed, so there's no recourse if the recipient is scamming you.

This isn't true.

All bank transfers and reversible. Some easier then other, but none are no-recurse, regardless what a low tier customer service agent insists. It may require more effort, and maybe someone above their pay grade, but it is possible.

And Zelle itself, like all electronic bank transfers in the US, is subject to regulation E, which puts the responsibility for unauthorized transfers on the banks (minus $50, a sum that most banks would waive). Zelle themselves mention regulation E on their website: https://www.zellepay.com/financial-education/pay-it-safe/und...

Some institutions erroneously claim that regulation E only protects from hacks: that is, if the scam was offline: someone convinced you to send them money, and you did, and got scammed, then it doesn't fall under regulation E. However, it seems the regulators disagree, and banks and Zelle do fall in line once you sternly write to their compliance department and the regulator reminding them of that.

Sending money to a scammer tends to be an authorized transfer; you made it yourself, intentionally. The Zelle page you said itself states "Because you authorized the payment, you may not be able to get your money back."

I would not hang my hat on a Regulation E complaint in this scenario.

I think you are both sort of correct. The pertinent bit of regulation E[1] appears to hinge on how the fraudulent transfer was done.

It looks like if you as the authorized person transfer money to somebody because you were scammed into doing so, then the regulation does not apply. However, if you were scammed into giving up your, say, debit card number or password, and this was used to to initiate transfers, the regulation does apply. The magic words here are "access device" and "unauthorized".

That being said once you start throwing around laws that the average consumer doesn't know about, on certified letters directed at important people, the bank very well might make you whole rather than fight it even if you have no case.

[1]: https://www.consumerfinance.gov/rules-policy/regulations/100...

Zelle can write that water are dry, it will not make it so. The customer intended to authorize a non-scammy transfer, but was scammed into authorizing himself into a fraud. As such, regulation E holds.

And if there's something bank fears is someone reminding their regulator the bank may not be following regulation to the letter.

It has been made very clear that regulation E is meant to held banks responsible for misuse of electronic services. For example, if you are coerced to draw money out of an ATM, regulation E holds, even as you authorized the withdrawal with your card and PIN code (it also makes perfect sense: there's assumption the same wouldn't be as easy had you had to use a teller for that withdrawal).

Wire transfers aren't reversible if you're not quick enough to do it before the money transfers out of the country. Home purchases and business wires have both seen over a billion dollars in wire fraud annually, just in the US.

https://www.rocketmortgage.com/learn/mortgage-wire-fraud

https://www.forbes.com/sites/forbesbusinesscouncil/2022/08/3...

Wire transfers are also reversible. It may not be easy or cheap to do so, but it is possible (the Citigroup $500mm mispayment is a great example: the error was done August 2020, and Citigroup are still working to undo it, at an expense to them. I'm certain it'll take them a few more months, and God only knows how many more billable hours at the very least).

It's not reversible by Zelle, but it is reversible by the bank. Zelle is just an intermediary between banks. Some banks make it easier to get a fraudulent transaction fixed than others.

I like Zelle, as it is not considered a payment network for tax purposes. Second, it enables money transfers between trustworthy parties. Instead of sending a check for $x (less than, say $3k), I can transfer $x right away to a friend/acquaintance.

This is true for most payment apps, to be honest. Buyer protections are limited without using something with transaction fees, like a credit card or PayPal goods and services.

The only time you’re using these apps for payments to unknown 3rd parties is buying on the used market. For local buying, you meet in person, in which case Zelle is fine since you can see the goods. For remote buying (like r/hardwareswap), you’re supposed to use something with protections like PayPal Goods and Services, or /also rely on the platform.

There are phishing scams associated with PayPal too, for example.

Is this the kind of rumor that starts a "run on the bank"?

How? The lender of last resort is the United State Government. Thank goodness the bankers will always be made whole.

The FDIC insures up to $250,000 per depositor, per insured bank. But the FDIC claims process only begins after a bank failure (likely caused by a run on the bank). https://www.fdic.gov/analysis/quarterly-banking-profile/fdic...

Is it true that if I had $50K in a bank, for the sake of example let's use Bank of America, and the bank just straight up loses my account and loses track of the fact that I had that money with them, FDIC does not ensure I get my money back? Would I just be reliant on the bank having good will towards me and giving me my money voluntarily? Is there any consumer protection that actually protects the consumer against business malpractice like this if FDIC doesn't?

https://www.helpwithmybank.gov/who-regulates-my-bank/index-w...

> How? The lender of last resort is the United State Government.

Lender of last resort makes runs less likely and lossy. It doesn’t prevent them altogether.

Also, plenty of runs end in the FDIC resolving in a way that the parent bank no longer exists.

Managed buyouts are preferred partially so that the government does not have to deal with the logistics of running a retail bank, but mostly because if a bank with sufficient funds takes over then there is no interruption to depositors’ access to funds.

The FDIC is required by law to use the plan for handling a failed bank that will cost the least to its fund.

Buyouts offers that cover all insured funds are typically cheaper than directly paying out. Indeed, most commonly the buying bank will offer to take all the full balance of any insurable account, not just up to the insurance limit. The logic here seems to be that the extra from taking on those balances is usually pretty small, and it does save work on the FDIC's side as there would be fewer creditors. Thus it makes bids with that include full balances more attractive than those that don't, increasing the chance that the buyer's bid will be selected for final resolution.

Of course, occasionally the winning bid is limited to just insured balances, and very occasionally, the cheapest option is for the FDIC to directly cut checks to handle the insurance side, and proceed as receiver in selling off any saleable assets and paying of creditors.

That doesn’t mean that a run can’t happen, just that it’s less bad than it was before real-time transfers from the fed.

I imagine any such event would require a bank to massively divest which could trigger a market event as well

everybody panicking and closing their accounts?

praise that brave reddit moderator for rushing in there to lock down the thread and remove any content that might hurt BoA's feelings.

Amateur moderation is awful and often exploitative.

I moderated a sub for about a year. At the time I felt like I was furthering a worthy cause. In retrospect I now feel like a schmuck who basically gave free labor to a company, making the platform more attractive to advertisers. I don't expect the hours I spent combing through troll posts had any measurable impact on the "cause" that sub was nominally furthering.

In general I no longer contribute content to platforms that directly leverage my contributions to more effectively pull in advertising or subscription fees. After seeing first-hand how moderators I "worked" with operate, I also assume any moderated social media content is corrupted by the moderators' biases.

In order for moderations to be sustainable and high quality, you need a large number of people who are: (a) intelligent, (b) unbiased, (c) willing to volunteer their time without compensation, (d) happy if someone else makes a profit off their work, & (e) willing to do the job forever.

There aren't many people like that.

More typically, they don't understand (c) or (d) in the context of moderation, or (a) and/or (b) are lacking. And once they do understand (c) and (d), (e) evaporates.

That was a peculiar dig at community moderation.

Twitter and Facebook repeatedly show how very wrong "professional" moderators get it. Almost like caring about a topic makes you better suited to maintain a community around it.

The other side of the coin is that many communities wouldn't exist without Reddit, and many wouldn't be tolerated by Reddit without moderators. Many subs have been closed for inadequate moderation. So you see it as free work, I say you get what you give. You want a nice place to chat? Pony up. Cash or effort.

> Almost like caring about a topic makes you better suited to maintain a community around it.

I think not caring about the topic makes you better suited to moderate it. It's way easier to dispassionately and evenly enforce rules when there's no possibility of a bone to pick.

I disagree.

Having skin in the game, wanting your community to blossom makes for much better moderators and community governance. They're far more likely to get involved in big tasks to fix long-standing issues. If rules need to change knowing the moderator calling for change helps a lot with acceptance.

My experience with paid moderators is they work in systems where they are vastly overworked so their willingness to actually engage with issues is low. Poor decisions get made. I've reported child porn and drug sales on Facebook and had a mod say they're okay. I have a few dozen examples like that. A lack of passion isn't good.

they're not amateurs

reddit mods are paid by outside companies and interest groups to specifically get access to places so they can control narratives

non-associated mods get offers from companies and interest groups for them to be in their favor

other, more nefarious mods have their own botfarms that they use to control narratives in their own massively popular subreddit because the police don't arrest themselves

media corporations, companies with specific interests, and intelligence agencies have all learned to play this game, reddit should have put the spots up for auction

It's like being a janitor but doing it for free.

> In retrospect I now feel like a schmuck who basically gave free labor to a company

You mean, like you're doing right now? Comments on HN can't be deleted after an hour because they add value to HN forever. And by being here you're adding value to them. Basically free labor.

The problem is that most of the time, threads like that quickly devolve. They go from intelligent, thoughtful conversation about an issue to people ranting, throwing insults, personal attacks, etc. Or just armchair financial experts giving terrible advice. (Par for the course with that particular subreddit)

Money can quickly become a heated discussion. I'd assume behind that thread is a wall of much worse comments that had to be removed. Removing them all gets exhausting, and sometimes it's better to just lock the thread and move on.

I really don't think they care one way or the other about BoA.

From BofA's website:

"Zelle: A safe and easy way to send and receive money fast!"[a]

BofA forgot to add:

"...unless your account goes into overdraft because we somehow lost your incoming Zelle transfer."

Let's hope that BoFA does right by customers.

[a] https://www.bankofamerica.com/online-banking/mobile-and-onli...

I will bet the do for the people who wade through customer support, but the vast majority of folks likely will just improve their profits by paying fees they shouldn’t have accumulated.

Why don't Americans use direct money transfer from one bank account to another, like rest of the world? I lol everytime I see these problems.

We do (ACH), but it takes 3-5 business days to complete.

ACH never "completes", there's no confirmation in the system. The bank merely decided 3 days is enough time to assume there isn't a reversal coming, but some reversal reasons can be expected to take up to 60 days.

Some banks have been offering "two days early payroll"; that just means they see enough transactions for your paycheck that they've decided to just trust it.

Pretty sure a bank IT problem is going to affect direct money transfers too?

I hate how hard it is to do bank transfers in the US.

When I was in Sydney, you just added someone's BSB and account numbers, and you could add their phone number and most apps would know how to translate that... and you could Vemno / Zelle without the app.

Dirt simple.

No clue why it has to be complicated in the US. Just seems moronic.

I wonder why this only effects BofA, given that Zelle is run by EWS and many banks use the service.

It's removed now. Does anyone remember enough to give the gist of what allegedly happened?

The stickied mod comment reproduces the post's contents.

> If you bank with BoA check your balance this morning. Our account is negative due to thousands of dollars in Zelle transfers suddenly vanishing overnight. Calling customer service goes nowhere, just dead air.

> Many other customers reporting the same problem: https://downdetector.com/status/bank-of-america/

https://www.unddit.com/

Always have checking\financial accounts at two different institutions. One of them can close your accounts or have delay accessing your money at any time and never have to give you a reason.

unddit: https://www.unddit.com/r/personalfinance/comments/10f8042/ba...

While I noticed this issue this morning as well, it seems it has been credited back as of this afternoon.

What are Zelle transfer?

Instant, no-fee, irreversible transfer between participating US bank accounts.

(Like most of the rest of the world has had for a decade or more, but it's new, and because it's new and there's very little education to consumers from the banks it's heavily used in scams. It also has a pretty confusing UX that lends itself to scams.)

It’s also a owned by the 5-6 largest consumer banks in the US (BofA, CapOne, etc).

So, they’re complicit in allowing the fraud to continue.

Use Zelle to transfer to the people you know--that's the intended purpose of Zelle. If you are buying a service/product, use credit cards or PayPal.

Or remind the banks that regulation E puts the responsibility of fraud (minus $50) on them.

US banks got scared by money transfer apps, and decided they want to provide a similar service, at no cost to customers, and minimal cost to them. Of course, they can't have it all, and now they try to put some costs they are not allowed to, onto their customers.

What should the banks do to prevent scams?

Ditch the patchwork nature of it, for starters.

See the Zelle "getting started" page at https://www.zellepay.com/get-started - there's no solid set of instructions because there's almost two thousand different implementations of it. Your bank's procedure may be entirely different than mine's; if your bank doesn't support it it's a different procedure alltogether.

As a result, scammers can fairly easily convince someone who's never or infrequently used it that their process (usually with a phished website posing as Zelle) is legit. The "it's a banking technology, but it's also a website and an app, maybe, it depends" thing doesn't help.

Allow reversing transactions that are proven to be scams, as they are required by law to do. https://www.investopedia.com/terms/r/regulation-e.asp

You can never really prevent scams, it is what it is. However, they need to keep a paper trail and reverse bad transactions.

If someone impersonates me or steals my debit card, they can do a bad ATM withdrawal and get cash. That can be reversed, but for some reason once Zelle is in the picture everything is written in stone.

lol, bofa.

SEPA instant payments are pretty new but yeah even Europe has that now.

Even before instant transfers, standard SEPA was quick and easy. The big step forward was when they let us add beneficiaries from a phone app or a website rather than by sending verification codes over snail mail, but that was a while ago now.

> most of the rest of the world has had for a decade or more What specific system are you implying?

In Slovenia, I can't make a bank transfer online when my bank is closed (at night). Money transfer between banks costs me 40 cents per transaction and international transfer in the EU costs me around 7 €.

Maestro card is instant and free and works even when the bank is closed, but it is only used for spending money.

I don't pay any fees for my bank account, since I'm younger than 27.

EU countries (and a few others) are part of SEPA, where we have SEPA Instant Payments, which offer instant payments between bank accounts, 24/7.

Price depends on the bank (and the type of bank account you have), but it's about 1 EUR or less.

---

Many countries also have local payment systems, that are usually limited to a single country. For example, in Slovenia, we have Flik Pay, which allows sending money between individuals via mobile app, without any fees, and it also works 24/7.

I see - probably the Nujno (urgent) checkbox on a SEPA form activates this SEPA instant payment.

I know about Flik and I like the appeal of it, but I do not use it because it requires a proprietary client (NLB Pay in my case). Do you know of any public or reverse engineered specification or unofficial FOSS client?

> international transfer in the EU costs me around 7 €

Are you sure about that? I thought with SEPA all Euro transfers within the EU have to be the same fee as national transfers, which is free for almost all consumer bank accounts in Austria.

My bank charges for instant transfers on my business account (around 8€), but other than that all transfers are free.

You are right, I verified this now. EU payments cost me the same amount as domestic payments.

The ~7 € charge I remember was probably due to conversion. I wanted to send money to Croatia, which at the time did not use Euro yet.

> I'm younger than 27

Why is age relevant to fees?

Lots of banks (at least in the EU) give free accounts to young people (usually until 25 or 27), in the hope that they'll stay a customer for life, because changing your bank account number is a hassle.

Instant and no-fee I can get behind but irreversible sounds like an awesome way to lose a lot of money.

I've seen it IRL. Zelle claims no responsibility and that they can't track what they sent.

Fines for failure to implement legally mandated Anti-Money Laundering measures in 3...2...1...

Seriously. If they can't, it will not be long until the omission is noticed.

I only ever worry of the opposite: reversibility leading to chargeback scams.

Reversibility means risk incurred on the transfer system which means not free. Reversibility to the people you pay also means you pay a premium as the vendor has to self or externally insure the risk the funds will be recalled.

"Instant" is wrong. I've had successful Zelle transfers take upwards of 60 minutes to clear without any sort of confirmation of progress. It's a real pain.

From everything I heard, the system in Germany/Europe is better than ACH, but instant interbank transfers are only a few years old, and usually are not feeless.

> irreversible transfer

Apparently they're not irreversible...

They're irreversible, except "unauthorized" transactions.

Most scammers generate authorized transactions via trickery. Banks won't accept "I was tricked" as "unauthorized"; they only count cases of actual account compromise, and even there... https://www.cnn.com/2022/10/03/business/nightcap-zelle-fraud...

> The bank data reviewed by Warren’s office suggest even the bulk of unauthorized cases are going unpaid. For example: PNC Bank indicated that its customers reported 10,683 cases of unauthorized payments totaling over $10.6 million. It refunded only 1,495 cases, totaling $1.46 million.

Zelle isn't a bank, it's just a mechanism to communicate a transfer between two banks. The bank at either end of the transaction is regulated and must reverse fraudulent transactions. The fact that PNC is not reversing all of them means they just need to be subjected to additional legal process to enforce existing law.

It doesn't matter what banks accept; they are required to by the regulator. That they try to weasel out of it just means they need to be regulated harder and at more cost to the executive suit.

It's more of a "transactions will not be reversed by user request or due to user error".

It isn't irreversible. No bank transfer is.

It’s also limited to 2k a day

The limit is up to each participating bank.

My bank varies the limit for me each day. Sometimes I can’t transfer $1000. Sometimes I can. Once I tried to transfer $3000 over many different days. No way. Can’t do it. Customer service says the limited cannot be raised past a certain point. And they won’t tell me what the limit is.

Ah interesting, well with Chase it's $2k which is quite annoying

BofA is a terrible bank. Safer to use a mattress.

Don't put all your eggs in one basket.

Have some physical cash, a couple of bank accounts, stocks and bonds, cryptocurrencies, valuable items if chaos ensues (guns, ammo, fuel, etc) and so on.

I’m a big fan of your list because (other than fuel), each item you list is an order of magnitude less likely to be necessary or even useful

Physical cash: very likely you need it some day soon

Multiple bank accounts: technical issues, fraud, etc, plenty of reasons that might make one accounts funds unavailable

Stocks: if there’s bank runs or such you can have equity to fall back on

Crypto: if your entire economy goes kaput but the world economy lives on, this can be useful

Guns, ammo: if civilization as we know it falls apart atleast you can shoot some people before starving to death

Ah, perfect, just in time for the DoJ announcing they're going after cryptographically sound and undisputable transfers of value.

Ah and Bitcoin is so dangerous. We obviously need central banks to solve all it's terrible problems. /s

Well does Bitcoin have anyone with $50 billion dollars on hand and an additional $500 billion dollar line of credit with the US government to cover things like the FTX collapse?

https://www.zellepay.com/ for those (like me) that don't know

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