New York Attorney General Letitia James has filed a lawsuit against Early Warning Services (EWS), the company behind electronic money-transfer service Zelle, alleging that it failed to protect its users from massive amounts of fraud. The lawsuit claims that EWS knew about the issue but did not implement safety measures, allowing scammers to steal over $1 billion.
The lawsuit comes after the Consumer Financial Protection Bureau dropped a similar case against some of Zelle’s backers in March. EWS is owned by a consortium of large US banks, including JPMorgan Chase, Bank of America, Capital One, and Wells Fargo.
According to the lawsuit, scammers were able to sign up for Zelle through a quick registration process that lacked verification steps, allowing them to pose as businesses and government entities. Zelle’s irreversible transfers also made it difficult for consumers to get their money back after realizing they had been targeted in a scam.
The NY AG’s office is seeking restitution and damages for New Yorkers affected by fraud on Zelle’s platform, along with a court order mandating that Zelle adopts anti-fraud measures. The lawsuit claims that EWS failed to remove scammers from the Zelle network after receiving complaints and did not require banks to reimburse customers for certain scams.
The case is similar to one filed by the Consumer Financial Protection Bureau earlier this year, but the NY AG’s office claims it has new evidence. A Zelle spokesperson has called the lawsuit a “political stunt” and said that more than 99.95% of all Zelle transactions are completed without any report of scam or fraud.
Source: https://edition.cnn.com/2025/08/13/business/ny-attorney-general-sues-zelle