US Bank Regulator Sues JPMorgan Chase, Wells Fargo, and Bank of America Over Zelle Scams
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against three major banking giants – JPMorgan Chase, Wells Fargo, and Bank of America – over their alleged failure to protect customers from widespread scams on the popular payments network Zelle. The CFPB alleges that hundreds of thousands of customers were denied assistance after filing fraud complaints, with some being told to contact the scammers directly to retrieve their lost money.
The lawsuit claims that the banks’ lax security measures allowed repeat offenders to hop between institutions, ignored red flag warnings from customers, and abandoned victims after fraud occurred. The CFPB Director Rohit Chopra said the banks rushed to launch Zelle without addressing security concerns, making it a lucrative target for scammers while leaving victims vulnerable.
Zelle has denied the allegations, stating that its policies exceed federal requirements and claiming that the timing of the lawsuit is driven by political factors unrelated to the platform. JPMorgan Chase had previously stated that the CFPB was going “above and beyond what the law requires” in its investigation.
The CFPB’s lawsuit seeks to stop the alleged unlawful practices, secure redress for consumers, and impose penalties on the banks. With collective losses totaling $870 million over seven years, the regulator is cracking down on the banking giants’ failure to protect customers from Zelle scams.
Source: https://dailyhodl.com/2024/12/20/jpmorgan-chase-wells-fargo-and-bank-of-america-customers-lose-870000000-to-scammers-on-zelle-forcing-victims-to-fend-for-themselves-cfpb