CFPB Sues Banks Over $870 Million in Zelle Fraud Losses
The Consumer Financial Protection Bureau accuses major banks and Zelle's operator of failing to protect consumers from widespread fraud on the payment platform.
- The CFPB filed lawsuits against Bank of America, JPMorgan Chase, Wells Fargo, and Zelle operator Early Warning Services, alleging inadequate fraud safeguards since Zelle's 2017 launch.
- Consumers reportedly lost over $870 million due to fraud on Zelle, with banks accused of ignoring complaints and allowing repeat offenders to exploit the system.
- The lawsuits claim Zelle's rushed launch prioritized competition over security, enabling scammers to create multiple accounts and evade detection.
- Defendants deny the allegations, arguing the lawsuits are politically motivated and could harm small banks and consumers by increasing costs and limiting access to Zelle.
- The legal actions come during the final days of the Biden administration, raising questions about whether the incoming Trump administration will continue or drop the cases.
Los Angeles Times 
AZ Central 