The Consumer Financial Protection Bureau (CFPB) filed a lawsuit Friday against Bank of America, JPMorgan Chase, and Wells Fargo, alleging the banks allowed systemic fraud to flourish on the Zelle payment platform. The suit claims customers lost over $870 million while the banks failed to provide proper assistance, reimbursements, or adequate investigations into complaints.
Systemic Fraud and Denied Assistance
CFPB Director Rohit Chopra criticized the banks for their handling of Zelle-related fraud, accusing them of enabling fraudsters while neglecting their customers. “These banks played a role in enabling systemic fraud and then played dumb when their customers were exploited,” Chopra said during a press call. He emphasized that customers trusted these institutions to safeguard their money but were left “fending for themselves when criminals struck.”
The lawsuit also names Early Warning Services, the operator of Zelle, as a defendant. Early Warning is owned by a consortium of major U.S. banks.
Zelle Responds to Allegations
Jane Khodos, a spokesperson for Zelle, defended the payment network, calling the CFPB’s lawsuit “legally and factually flawed.” She argued that Zelle has industry-leading fraud prevention measures and criticized the CFPB’s actions as politically motivated.
