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Comment by Cody-99 | Hacker News Reader

One of the main benefits of zelle was it couldn't be clawed back. Scams suck but paypal and other related apps have a major problem where the money gets clawed back after a legitimate transaction/deal is complete. Hopefully steps are taken to ensure this type of fraud doesn't become an issue.

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In theory I like the idea of an instant-settlement irreversible payment service, but realistically I don't think such a thing can exist for long. Pretty much by its nature, it will attract more and more scams until anger and political pressure build up enough that it is forced to implement protections and clawbacks. "Delayed settlement with clawbacks" is a stable equilibrium in a way "instant settlement with no protection" is not.

I kind of agree, though to be fair, "instant settlement with no protection" is how cash works. There is no mechanism with physical cash transference itself to claw back the money from a scam. You can go talk to the police and they might be able to help, but nobody can go talk to the Lords of Cash and convince them to magically teleport the currency back into your hands.

That mechanism for cash is called "civil court"

Yeah you're SOL if you give cash to someone whose identity you don't know, but that's hard to do unintentionally with cash. Whereas Zelle will shield scammers' identities so your recovery options begin and end with Zelle.

The civil court will give you an order. You still have to get it enforced.

Yes, that is indeed the next step in the legal process of clawing back cash you were scammed out of.

Cash scams don’t scale well, though. Someone has to be physically next to you and when the numbers start getting big cash is both unwieldy and not that easy to get.

Yep, we already saw this years ago with Dwolla (which was much worse than Zelle because it was crypto-adjacent).

Zelle could always place a high bar for clawbacks, like, say, requiring a police report.

A police report is a high bar for a $20 transaction (perhaps even way too high) but too low for, say, a series of transactions adding up to $10,000. Having a police report is easy if, say, you're employed by the police.

>Having a police report is easy if, say, you're employed by the police.

Having a police report is easy if you are in America.

All it takes is a phone call and a story. A police report is super simple to get

This is absolutely not the case in Oakland and San Francisco (among other places), where the police will require you to go to a station to file the report in person and then will stall or outright refuse to do it.

Really? They don't let you file it online?

https://www.oaklandca.gov/services/report-a-crime-online

https://www.sanfranciscopolice.org/get-service/police-report...

There's apparently even a SaaS for them called Coplogic.

There’s a difference between having the site and actually doing anything with the information, including providing a copy of the report to the person trying to file it. I have friends, family members, and neighbors who have all had this experience with OPD. The news, Nextdoor, and Reddit around here are also full of stories of people who get nowhere with OPD and SFPD. Anecdotal, sure, but it’s been an almost universal sentiment amongst everyone I’ve talked to.

The police usually can't do much for stolen items. Unless you can give them unequivocal proof of an injustice, personal theft is a case of he said/she said. Just think of the implications if they did act on every request. You meet up and hand off a PS5 and take cash for it, you decide you miss your PS5 so you claim it's stolen. Should the police just take you at your word?

If you provided them an audio (ideally with visuals) recording of the interaction and the identity of the thief, of course they can help. Otherwise, it's up to the courts to figure out in most cases.

As to the point of filing, as the sibling response pointed out, it's more for an official record to be on the books for insurance to act on. They'll then use it in their investigations/civil proceedings.

All of that is true. But what I’m saying is that the police routinely will do their best to avoid even taking a report or providing documentation, at least in the experiences I’ve had described to me. There’s essentially no expectation that anything will be done to investigate the crime.

> There’s essentially no expectation that anything will be done to investigate the crime.

Sure, but that's like saying there's no preparation for an earthquake being done on houses in London.

If you can show an earthquake is likely to happen, sure people will prepare. Otherwise, why bother? Let the Court/insurance sort it out.

Oh yeah, I don't expect anything to come from police reports. It's the same here in Oregon. They're useful for insurance claims but I don't expect the police to spend even a minute investigating them afterward.

Where is this miracle police department because every time I've attempted this I got told to go pound sand in not so many words but with clear contempt.

Yup, in most cases now you can just submit them online, probably because so many things require them.

What matters isn't really how easy it is to get, but rather than it raises the bar for making false statements.

Do criminals overseas really care if they have an arrest warrant in Lane County Oregon for filing a false police report?

Hopefully there are some hurdles for criminals overseas in opening an US checking account (which is a prerequisite to participate in Zelle)!

This is where those roadside "work from home" opportunities lead. You become a part-time money launderer who routes stolen funds through your own personal accounts and wire-transfers the balance overseas to them.

Yes, and in that case, the unwitting (but really often semi-witting) money mule is likely to be left holding the bag, e.g. if the outbound international wire ends up being non-reversible, but the inbound Zelle payment they're "forwarding" does get reversed.

I have attempted to file police reports at multiple times in my life. I have not been successful.

Zelle is exclusive to the US so yes, exactly

If "corrupt police officers committing highly visible/papertrailed fraud" is in your threat model for payment scams, I wouldn't be surprised if other payment methods were vulnerable to this as well.

There's nothing that stops Zelle from doing further diligence around a $10,000 fraud, the police report is just there to significantly raise the barrier for a fraudster disputing charges.

It's tough to do fraud at scale when you have to show up to a police station, give them all your info, and leave a detailed paper trail.

Once the money is frozen you could go straight to small claims court for those $10k disputes. Anything bigger call the lawyers.

This is basically the paypal model. No one has time for small claims court

I can make a police report online in five minutes.

In person, with a valid ID. A lot of police reports are done online, especially for property crimes. It would be too easy for criminals to automate them. If it's an e-fraud allegation, it should require showing physical ID with a detective, and/or a video report (yes I know about deepfakes) to prevent script kiddies from automating the process.

There are always two error rates.

Does an escrow based transaction help prevent scams. What does history have to shows us with SilkRoad as an example?

Yeah this was the only good thing about zelle...once you got money...you had it. Now there is all this nonsense about how your money could just disappear at anytime in the next 90 days and there is nothing you can do about it. Guess the feds really hated the idea of normal peasants having a way to transact with finality; something we obviously need to be "protected" from.

Transactions with finality are a bug, not a feature. Reversing a transaction (under certain circumstances) is enshrined in the almost the entire history of US common law and is protected in federal statutes.

A money transfer system that prohibits reversals doesn't reflect what money needs to do.

Wait, how so? Didn't most transactions take place in cash for most of history? Cash isn't reversible.

Cash is reversible in a way that you find person that you exhanged goods and services with and they give you your money back, whether voluntarily or forced by court order.

So no different from the previous Zelle model

It's quite interesting that cash escapes such criticisms by virtue of simply not being a "system". Perhaps crypto will win this space after all.

Cash transactions are also reversible if there is evidence they happened and a desire to take it to court.

By this logic Zelle and crypto are also reversible

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