Customers at JPMorgan Chase, Wells Fargo and Bank of America have collectively lost $870 million to scammers on Zelle in the last seven years, according to a powerful US bank regulator.
The Consumer Financial Protection Bureau (CFPB) says it’s suing the three banking giants and Zelle’s parent firm for allegedly failing to protect people from widespread fraud on the popular payments network.
The lawsuit, which has been anticipated for months, alleges hundreds of thousands of the banks’ customers filed fraud complaints and were largely denied assistance, with some being told to contact the fraudsters directly to get their money back.
“Bank of America, JPMorgan Chase, and Wells Fargo also allegedly failed to properly investigate complaints or provide consumers with legally required reimbursement for fraud and errors.
The CFPB is seeking to stop the alleged unlawful practices, secure redress and penalties, and obtain other relief.”
The CFPB alleges widespread consumer losses and security failures on the part of the banks, stating the lenders limited identity verification measures, allowed repeat offenders to hop between banks, ignored red flag warnings from customers and abandoned customers after fraud occurred.
CFPB Director Rohit Chopra says the banks, which co-own Zelle, rushed to launch the platform without properly addressing security concerns.
“The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle.
By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.”
Zelle says it’s fully prepared to defend itself in court.
“The CFPB’s attacks on Zelle are legally and factually flawed, and the timing of this lawsuit appears to be driven by political factors unrelated to Zelle.
Zelle leads the fight against scams and fraud and has industry-leading reimbursement policies that go above and beyond the law.”
JPMorgan Chase has previously said it may sue the CFPB over the Zelle investigation, stating the agency is going “above and beyond what the law requires.”
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on X, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
Credit: Source link
