CFPB Sues Zelle And Banks Over Consumer Fraud

The Consumer Financial Protection Bureau (CFPB) has sued Zelle and three major banks—Bank of America, JP Morgan Chase, and Wells Fargo—accusing them of failing to protect consumers from rampant fraud on the payment app, Detroit Free Press reported.

Zelle disputes the CFPB’s figures, arguing that many fraud reports are unsubstantiated or due to user error. I Photo: Tech Daily Wikimedia Commons

The lawsuit claims that since Zelle’s launch in 2017, fraud losses involving customers at the three banks have exceeded $870 million. The CFPB blames a rushed rollout and inadequate safeguards for the widespread scams.

Zelle disputes the CFPB’s figures, arguing that many fraud reports are unsubstantiated or due to user error. A Zelle spokesperson stated, “The CFPB’s numbers are misleading, as many reported claims are not actual fraud.”

The case marks a significant move by regulators to address consumer protection in digital payment platforms.