CFPB Sues JPMorgan, Bank of America, Wells Fargo, and Zelle Operator Over $870M in Fraud Losses

Dec 20, 2024, 03:35 PM

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo, along with the operator of the Zelle payment network, Early Warning Services, for failing to adequately protect consumers from widespread fraud. The CFPB alleges that the banks rushed the Zelle network to market to compete with other payment apps without implementing sufficient safeguards, resulting in over $870 million in customer losses since Zelle's launch in 2017. The lawsuit claims that the banks did not properly investigate fraud complaints or provide required reimbursements, leaving consumers vulnerable to scams. CFPB Director Rohit Chopra stated that the banks' failure to put in place proper safeguards turned Zelle into a 'gold mine for fraudsters.' Early Warning Services, which operates Zelle, has responded by asserting that the CFPB's claims are without legal basis and that Zelle has industry-leading policies to combat fraud.