New York’s attorney general sues the payment app’s parent company after the US Consumer Financial Protection Bureau dropped its own case following major budget cuts.
Zelle is under fire for allegedly failing to compensate users who’ve fallen for scams through the cash transfer app.
New York Attorney General Letitia James filed suit on Wednesday, alleging that Zelle’s lack of “critical safety features” helped scammers steal over $1 billion from US consumers.
The lawsuit targets Zelle’s parent Early Warning Services, LLC, which is owned by the top banks, including Wells Fargo, Capital One, and Bank of America. The company « knew for years that fraud was spreading on Zelle and failed to take meaningful action to stop it », James says.
“Even when EWS did receive reports of fraud, it failed to promptly remove the fraudsters from the Zelle network or require banks to reimburse consumers for certain scams,” she adds.
The US Consumer Financial Protection Bureau (CFPB) dropped a case against Zelle’s parent company in March after the Trump administration gutted the agency.
