tl;dr
The Consumer Financial Protection Bureau (CFPB) is suing JPMorgan Chase, Wells Fargo, and Bank of America, along with Zelle's parent company, for allegedly failing to protect customers from widespread fraud on the Zelle payments network. The lawsuit alleges that the banks did not properly investigat...
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against JPMorgan Chase, Wells Fargo, and Bank of America, as well as Zelle's parent company, for allegedly failing to protect customers from widespread fraud on the Zelle payments network. The allegations include the banks' failure to properly investigate fraud complaints, provide required reimbursement, and address security concerns. The CFPB seeks to stop these practices, obtain redress and penalties, and address security concerns.
Zelle has defended itself, claiming that the CFPB's lawsuit is legally and factually flawed. JPMorgan Chase is also considering suing the CFPB, arguing that the agency is exceeding legal requirements.
According to a powerful US bank regulator, customers at JPMorgan Chase, Wells Fargo, and Bank of America have collectively lost $870 million to scammers on Zelle in the last seven years. The CFPB alleges that the banks and Zelle's parent company failed to properly investigate fraud complaints, provide consumers with legally required reimbursement for fraud and errors, and address security concerns.
CFPB Director Rohit Chopra criticized the banks for rushing to launch Zelle without adequate safeguards, stating that Zelle became a "gold mine for fraudsters" due to the failure to implement proper safeguards.
Zelle has stated its readiness to defend itself in court, asserting that the CFPB's attacks are legally and factually flawed. JPMorgan Chase has also indicated potential legal action against the CFPB, claiming that the agency is going beyond what the law requires.