💸 Zelle-scam spotlight

…plus cord-cutting, carry trades, and coin mining Diego Thomazini/Shutterstock Scammers get Zelle-ous   Hey Snackers, You’ve heard of streaming-password moochers, but what about wholesale-card moochers? Costco is doing a Netflix-style crackdown, rolling out [membership-card scanners]( at its warehouses nationwide to make sure folks aren’t freeloading for free samples. The S&P 500 closed out the week [mostly flat]( after several days of wild swings by the major US indexes. This week, investors have eyes on July’s consumer-inflation report, due Wednesday. ✏️ Snacks Aptitude Test: not the SAT you took junior year. See if you can get a perfect score on our [Snacks Seven Quiz](, which covers the past week’s biggest biz news. Try the first Q: - Dolce & Gabbana is launching its first fragrance for who? ([Check your answer](.)   SWIPED [Regulators probe big banks on Zelle’s fraud policies as payment-app scams pile up]( What the Zelle… Big banks are [getting heat]( from regulators as scammers cash in on money-transfer service Zelle. Launched in 2017, Zelle is owned by seven of America’s largest banks, including JPMorgan Chase, Bank of America, and Wells Fargo (it’s auto-included in many banking apps). Today, Zelle is one of the biggest players in mobile payments, processing nearly 3x as many transactions as PayPal’s Venmo last year. But Zelle users have been complaining about scams [for years](. Now the Consumer Financial Protection Bureau is investigating Zelle’s partner banks over how they've handled the fraud surge. - The CFPB is said to be looking into whether banks are shutting down scammers’ accounts quickly enough and doing thorough screens of their customers. - Banks say that most Zelle transactions are legitimate and that they’ve been taking steps to boost safety (like: warning users about scams before they transfer $$). - FYI: 2B+ people worldwide use mobile payments, and 60% of Americans use payment apps to shop. Zelle’ing into the void… Last year US consumers lost $210M in scams across all payment apps. Deception methods have included fraudsters posing as bank employees, dog breeders, and FB Marketplace merchants (and lots of email phishing links). The problem: payment apps operate in a legal gray area. Banks can avoid reimbursing customers for funds lost to scams because users approved those transactions, even if they were conned into doing so. A recent report said that JPMorgan, Wells Fargo, and Bank of America reimbursed only 38% of “unauthorized” transactions reported last year (nearly half of what they approved in 2019). - Check-out: Legislators introduced a bill this month that would update electronic money transfer laws to protect customers from payment-app fraud. - I(don’t)OU: Banks are required to refund customers only for transactions they didn’t authorize (like: charges on a stolen credit card). THE TAKEAWAY Seamlessness is a double-edged sword… Payment apps have allowed millions of consumers and small businesses to easily send and receive payments quickly. But they’ve also made it easier for scammers to rip people off, prompting calls for more protections. It could be a lengthy battle: banks say refunding scammed customers could attract more fraud and cost them billions. JPMorgan’s considering suing the CFPB over its Zelle investigation. [Read this online](   EVENTS Coming up this week Mine your business… Hut 8, one of the largest bitcoin miners in North America, is set to report tomorrow. Its earnings will give a glimpse into an industry altered by last quarter’s [halving](. That shift in bitcoin’s code led to slashed miner revenues and disappointing Q2 earnings from mining rivals Marathon Digital and Riot Platforms (even with June’s near-record BTC price of $71K+). Last time it reported, Hut 8’s (pre-halving) quarterly revenues were up more than 3x on the year. Now the mining giant’s results could show an industry catching its breath — or one poised for consolidation. Showing the receipt… Walmart reports this week, after its Q1 sales rose 6% to ~$162B. The world’s largest retailer is gaining ground in groceries (which make up 60% of its US sales) as shoppers hunt for discounts: it captured a record 37% of US online grocery sales in Q2, beating all supermarkets. Walmart’s benefited as bargain-seeking consumers trade down to cheaper store brands. This year retailers including Walmart, Target, Amazon, and Walgreens have [cut prices]( on thousands of staples to lure shoppers. Analysts expect that Walmart will unbox more growth when it reports.   ZOOM OUT Stories we’re watching More like slashing… Cable cord-cutting’s heating up as streamers add live sports, bundles, and ads (aka… become more like cable). Last week, Warner Bros. Discovery said its cable networks lost $9B in value, leading the HBO parent to post an eye-watering [$10B quarterly loss](. Meantime, Paramount Global’s revenue got dragged down by sagging cable subs and TV ad sales. On the plus side, Warner’s streaming unit (think: Max) gained 3.6M subs and Paramount’s had its first profit. Disney’s stream team (Disney+, Hulu, and ESPN+) also [notched its first]( combined profit. Yen it rains it pours… One factor that [contributed]( to last week’s [market mayhem]( could keep having ripple effects. After Japan raised its interest rate to a 15-year high, investors dumped hundreds of billions worth of assets bought with borrowed yen. In other words, they rapidly unwound “carry trades” — borrowing in a currency with low interest rates to fund investments elsewhere in hope of higher returns. Even though Japan signaled it’s done raising rates while markets are “unstable,” carry-trade unwinding could continue: some analysts said the Chinese yuan could be next.   ON SHERWOOD [We’re so thirsty for cheap Chinese stuff that there might not be enough planes to ship it]( With Amazon trying to elbow in on Temu, competition will be fierce. Air cargo rates from China to the US are already rising. [Read More.](   What else we're Snackin' - [Zapped](: Americans’ electricity bills in June were almost 16% higher than a year earlier as heat waves roasted communities nationwide, AI data centers juiced power demand, and more folks WFH’d (and [cranked the AC](). - [Sick](: 400M people have had long Covid, according to a new report that estimated that the global economic costs of the chronic condition top $1T/year. Up to 4M people were unemployed in 2022 because of it. - [FlyHail](: Air-taxi company Archer Aviation said it plans to launch its passenger service in LA in 2026 ahead of the World Cup. Jeep maker Stellantis will reportedly provide $370M for Archer’s ramp-up.   Snack Fact of the Day [Wikipedia gets 15B page views/month](   This Week - Monday: Tour de France Femmes begins. Earnings expected from Barrick Gold, Sun Life Financial, and BuzzFeed - Tuesday: Producer-price data for July. Made by Google event. International Left-Handers’ Day. Earnings expected from Home Depot - Wednesday: Consumer-inflation report for July. National Financial Awareness Day. Earnings expected from UBS, Dole, Performance Food Group, and Cisco Systems - Thursday: Retail sales figures. US industrial production for July. Earnings expected from Alibaba Group, Walmart, JD.com, Deere, Applied Materials, and H&R Block - Friday: University of Michigan consumer-sentiment survey for August. US housing starts. National Work from Home for Wellness Day. World Ploughing Championship. Authors of this Snacks own bitcoin and shares of: Amazon, Disney, Riot Platforms, Warner Bros. Discovery, and Walmart   [Instagram]( [Twitter]( [Sherwood Logo]( Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... 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