Zelle and Banking Giants Accused of User Protection Failures Against Fraud
Zelle and Banking Giants Accused of User Protection Failures Against Fraud
The government’s consumer watchdog alleged that Zelle and three banking giants have failed to protect users from fraud on the peer-to-peer payment network. The Consumer Financial Protection Bureau (CFPB) claimed that Bank of America, JPMorgan Chase, and Wells Fargo lagged in cracking down on scammers and didn’t properly investigate complaints of fraud. This misconduct is said to have cost consumers over $870 million since Zelle launched in 2017.
CFPB Director Rohit Chopra stated, “The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle. By failing to implement proper safeguards, Zelle became a gold mine for fraudsters, leaving victims to fend for themselves.”
Zelle defended itself, stating it would counter the “meritless lawsuit.” Zelle spokesperson Jane Khodos mentioned, “CFPB’s misguided attacks will embolden criminals and cost consumers more in fees.”
Concerns Over User Security
Approximately 143 million consumers and small businesses are enrolled in Zelle. In 2023, Zelle reported that 99.95% of payments were made without scams or fraud complaints. Furthermore, Zelle maintains that it reimburses customers for all instances of fraud as per legal requirements.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.