CFPB Sues Major Banks and Zelle's Parent for Allowing Fraud to Proliferate; Customers Lost Over $870 Million

Dec 20, 2024, 04:36 PM

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against JPMorgan Chase, Bank of America, Wells Fargo, and Zelle's parent company, alleging that the firms failed to protect consumers from widespread fraud on the peer-to-peer payment network Zelle. According to the CFPB, customers have collectively lost more than $870 million due to fraud on Zelle since its launch in 2017. The lawsuit claims that the banks, facing competitive pressure from new digital payment apps, rushed to launch Zelle without implementing adequate consumer protections and allowed fraud to proliferate on the platform. The CFPB alleges that the banks failed to properly investigate fraud complaints or reimburse victims, leaving customers vulnerable to financial losses. The lawsuit comes amid an impending change in leadership at the CFPB.