New York Attorney General Letitia James has filed a lawsuit against the parent company of payments network Zelle, alleging that it enabled fraud by allowing scammers to steal over $1 billion from users between 2017 and 2023. The investigation found that Early Warning Services, the owner of Zelle, designed the platform without critical safety features.
The lawsuit claims that EWS knew about the flaws in the system but failed to implement basic safeguards or enforce anti-fraud rules on its partner banks. As a result, Zelle became a hub for fraudulent activity due to a lack of verification steps during registration.
James is seeking restitution and damages, as well as a court order requiring Zelle to implement anti-fraud measures. She stated that no one should be left to fend for themselves after falling victim to a scam, and she looks forward to getting justice for the New Yorkers who suffered due to Zelle’s security failures.
Zelle’s spokesperson has dismissed the lawsuit as a “political stunt” and a copycat of a similar lawsuit by the Consumer Financial Protection Bureau. The CFPB had previously sued EWS and three major banks that dominate Zelle transactions, but dropped the suit amid concerns about their handling of fraud cases.
Source: https://www.cnbc.com/2025/08/13/new-york-letitia-james-zelle-lawsuit.html