https://nypost.com/2024/12/20/business/jpmorgan-wells-fargo-bofa-facing-federal-lawsuit-over-zelle-payment-network-fraud/
A federal regulator sued JPMorgan Chase, Wells Fargo and Bank of America on Friday, claiming the banks failed to protect hundreds of thousands of consumers from rampant fraud on the popular payments network Zelle, in violation of consumer financial laws.
In the federal civil complaint, the Consumer Financial Protection Bureau asserts that the banks rushed to get the peer-to-peer payments platform to market without effective safeguards against fraud and then, after consumers complained about being defrauded on the service, largely denied them relief.
“Shortly after Zelle’s launch, significant problems, including fraud being perpetrated on consumers using Zelle, quickly became apparent. But defendants did not take meaningful action to address these clear defects for years,” according to the complaint.
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The CFPB claims that the banks violated federal consumer financial laws governing electric funds transfers, which require banks conduct “reasonable investigations” when consumers report transaction errors, and the agency’s prohibition on unfair acts or practices by failing to take steps to prevent and address fraud on Zelle.
The agency seeks an unspecified amount of money to cover refunds, damages and penalties.
“Customers of the three banks named in today’s lawsuit have lost more than $870 million over the network’s seven-year existence due to these failures,” the CFPB said.
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Also named as a defendant in the lawsuit is Early Warning Services, a fintech company based in Scottsdale, Arizona, that operates Zelle.
EWS is owned by seven U.S. banks, including JPMorgan, Wells Fargo and Bank of America.
Those three banks are the largest financial institutions on the Zelle network, accounting for 73% of activity on Zelle last year.
"San Francisco-based Wells Fargo declined to comment on the lawsuit."
Talk about dishonest firm. Good luck with your consent order. Swine.