CFPB Sues Zelle, Banks Over Fraud Allegations

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Zelle and its associated banks—Wells Fargo, Bank of America, and JPMorgan Chase—over allegations of failing to protect consumers from fraud, resulting in over $870 million in losses since Zelle's launch in 2017. The CFPB accuses these institutions of inadequate fraud prevention measures, poor investigation of fraud complaints, and not sharing information about fraudulent activities across banks. Zelle and its banks allegedly rushed the payment platform to market to compete with apps like Venmo and CashApp, neglecting proper safeguards. Zelle's operator, Early Warning Services, and the banks have rejected the allegations, calling the lawsuit 'meritless'. The CFPB seeks consumer compensation and cessation of the alleged unlawful practices, while Zelle maintains that its reimbursement policies exceed legal requirements.