Chase has warned customers that it will start blocking payments to social media contacts through the Zelle P2P network over fraud concerns.
The bank's Zelle user agreement is being updated from 23 March in an effort to cut down on fraudulent transactions when people use the service to make purchases through social media channels such as Facebook Marketplace.
Explaining the move, Chase says that nearly 50% of scams reported to it originate on social media and that Zelle "is meant to pay friends, family and other trusted recipients you know, not for others you meet on social media".
The updated services agreement adds: “The Service is not intended, and should not be used, for the purchase of goods from retailers, merchants, or the like, including on or through social media or social media marketplaces or messaging apps.”
The update means that if the receiving party of a Zelle transfer is “identified as originating from contact through social media,” Chase may decline or block that payment from going through.
Alternatively, it may ask for more details on the “purpose of payment, the method of contact with your recipient or other details we deem appropriate to assess whether your payment has elevated fraud or scam risk, or is an illegal, ineligible or improper payment”.
Zelle is hugely popular, with over 150 million enrolled users, who sent more than $1 trillion through the platform last year.
However, it has also drawn scrutiny over how banks protect users from scammers, prompting the Consumer Financial Protection Bureau to file a lawsuit late last year against JPMorgan Chase, Bank of America and Wells Fargo, accusing them of allowing fraud to "fester" on the platform.