Photo by Joel de la cruz: https://www.pexels.com/photo/building-of-bank-of-america-5312060/
On Wednesday January 18, thousands of transactions completed via the payment-processing service Zelle seemingly vanished from the accounts of Bank of America customers without a trace. After hours of panicked outrage on social media, a Bank of America spokesperson came out to confirm that the issue had been resolved later by the afternoon. All the transactions performed during the delay period were allegedly reposted. No compensation has so far been announced for the customers, some of whom might have lost part of their fortune over the course of the debacle.
According to outage report data collected by the site Downdetector, the issue caused panic among customers starting around 9 a.m. in the morning, after which many took to social media to slam what they perceived to be the Bank of America’s incompetence leading to the momentary loss of millions of dollars in digital transactions.
The processing company, through which the vanished transactions were carried out, immediately responded to comments on Twitter, pointing out that the reporting issue was not a result of any server issues on Zelle’s part. A Zelle representative told the NPR that “Transactions on the Zelle Network outside of Bank of America are not impacted.” The assertion was easily verifiable, and appears to be true. Zelle serves over 1,700 financial institutions in the U.S. and any network-wide disruptions would have caused a much greater impact.
In the afternoon, the Bank of America confirmed that all the data vanished earlier was visible once again on the Bank’s network. The issue was briefly blamed on an error in ‘posting’, rather than the Bank’s database. No compensation for the customers affected has been announced, nor are any major lawsuits resulting from the incident publicly known so far.
The incident was further highlighted by an online statement from the office of prominent Senator Elizabeth Warren (D-MA). Senator Warren, who sits on the Senate Committee on Banking, Housing, and Urban Affairs, criticized both Bank of America and Zelle. She alleged on Twitter that the institutions are “apparently failing customers again, with money somehow disappearing from accounts. This should be fixed immediately and customers should be compensated.” She recalled that this is not the first time Zelle has had “serious fraud issue.”
She was likely alluding to a report issued last year under her supervision, which tracked a total of close to $500 million in fraudulent transactions on Zelle over the year 2021 alone. The report called for better regulatory supervision to prevent needless customer losses in the future.