On Friday, the Consumer Financial Protection Bureau (CFPB) sued four financial companies involved with Zelle. The CFPB’s lawsuit (via CNBC) accuses Zelle’s operator (Early Warning Services) and three of the service’s partner banks — JPMorgan Chase, Bank Of America and Wells Fargo — of failing to protect consumers from widespread fraud on the peer-to-peer payment system.
The CFPB says customers of those three banks have lost over $870 million during Zelle’s seven years as a payment service. The suit claims hundreds of thousands of customers who filed fraud complaints were denied meaningful assistance, with some being told to “contact the fraudsters directly to recover their money.” (Pro tip: Don’t do that.)
“The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,” CFPB Director Rohit Chopra wrote in a statement. “By their failing to put in place proper safeguards, Zelle became a gold min
