Overview

• Attorney General Letitia James filed suit August 13 in New York state court against Early Warning Services, the bank consortium that operates Zelle
• The complaint alleges that design flaws and weak enforcement allowed scammers to steal more than $1 billion from users between 2017 and 2023
• The state action follows the federal CFPB’s withdrawal of a similar lawsuit in March as the Trump administration scaled back the agency’s enforcement
• The lawsuit seeks restitution and damages for affected consumers and a court order mandating robust anti-fraud controls and loss accounting
• Early Warning Services and Zelle deny the allegations as a political stunt, and the seven bank owners are not named as defendants