CFPB Sues Major Banks Over $870 Million in Zelle Fraud Losses

The lawsuit accuses JPMorgan Chase, Bank of America, Wells Fargo, and Zelle's operator of failing to protect consumers from widespread fraud since the payment network's 2017 launch.

The Consumer Financial Protection Bureau (CFPB) alleges that Zelle and its co-owning banks failed to implement sufficient safeguards, leading to over $870 million in consumer fraud losses since 2017.
The lawsuit claims the banks ignored fraud complaints, denied reimbursements, and advised victims to contact fraudsters directly to recover stolen funds.
Zelle's operator, Early Warning Services, and the three banks named in the suit account for 73% of Zelle's activity and are accused of enabling repeat offenders by failing to share fraud information across institutions.
The CFPB is seeking compensation for victims, civil penalties, and operational changes to improve fraud prevention and consumer protections on the platform.
The banks and Zelle have pushed back, calling the lawsuit politically motivated and asserting that the majority of transactions occur without incident, citing a 99.95% success rate in 2023.