• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick CFPB sues America’s largest banks for ‘allowing fraud to fester’ on Zelle
Editor's Pick

CFPB sues America’s largest banks for ‘allowing fraud to fester’ on Zelle

by December 21, 2024
by December 21, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The Consumer Financial Protection Bureau is suing America’s three largest banks, accusing the institutions of failing to protect customers from fraud on Zelle, the payment platform they co-own.

According to the suit, which also targets Early Warning Services LLC, Zelle’s official operator, Zelle users have lost more than $870 million over the network’s seven-year existence due to these alleged failures.

“The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,” said CFPB Director Rohit Chopra in a statement. “By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.”

Among the charges:

The CFPB’s suit seeks to change the platform’s operations, as well as obtain a civil money penalty, that would be paid into the CFPB’s victims relief fund.

A spokesperson for Zelle called the suit misguided and politically motivated.

“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,’ Jane Khodos, Zelle spokesperson, said in an emailed statement. ‘Zelle leads the fight against scams and fraud and has industry-leading reimbursement policies that go above and beyond the law.’

In a follow-up statement, a Zelle spokesperson called the magnitude of CFPB’s claims about customer losses due to fraud ‘misleading,’ adding that ‘many reported fraud claims are not found to involve actual fraud after investigation.’

A JPMorgan spokesperson echoed those sentiments, calling it ‘a last ditch effort in pursuit of their political agenda.’

‘The CFPB is now overreaching its authority by making banks accountable for criminals, even including romance scammers,’ the bank said. ‘It’s a stunning demonstration of regulation by enforcement, skirting the required rulemaking process. Rather than going after criminals, the CFPB is jeopardizing the value and free nature of Zelle, a trusted payments service beloved by our customers.’

A Bank of America spokesperson highlighted the importance of Zelle to everyday users.

‘We strongly disagree with the CFPB’s effort to impose huge new costs on the 2,200 banks and credit unions that offer the free Zelle service to clients,’ said William Halldin in an emailed statement. ’23 million Bank of America clients have embraced Zelle, regularly using it to send money to friends, family and people they trust.’ 

Via email, a Wells Fargo spokesperson declined to comment.

Launched in 2017, Zelle allows users to send and receive money electronically. The platform has previously come in for criticism by Senate Democrats: Most recently, Sen. Richard Blumenthal, D-Connecticut, found customers had disputed over $372 million in scams and fraud in 2023 — with nearly three-quarters of the claimed losses never reimbursed by the banks.”

In its statement regarding the CFPB suit, Early Warning said reports of scams and fraud had decreased by nearly 50% in 2023, resulting in 99.95% of payments being sent without a report of scams and fraud.

The CFPB has announced a number of measures this month designed to protect consumers amid threats to its continued existence from the incoming second Trump administration.

This post appeared first on NBC NEWS
You Might Also Like
  • Ex-employee charged with stealing $22M from Jacksonville Jaguars for luxury shopping spree
  • See how the prices have changed for popular grocery items
  • India’s 2nd-wealthiest person charged by U.S. in $250 million bribery scheme
  • Nvidia says Anthropic is telling ‘tall tale’ in its defense of U.S. AI chip restrictions on China
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Party City to close all of its stores, report says
next post
Week Ahead: NIFTY’s Behavior Against This Level To Influence Trends For The Coming Weeks

You may also like

Savings drained and living off $2,400 a month, a Florida...

July 18, 2024

Retiring Corvette ‘godfather’ on EVs, spinoff and a performance SUV

August 6, 2024

Former Wells Fargo executive to plead guilty to charge in...

March 17, 2023

Hooters to close ‘underperforming’ restaurants amid broader industry woes

June 26, 2024

The Eclipse Foundation Announces The Release of Sparkplug 3.0 and...

December 8, 2022

America’s downtown centers wither amid fading hopes for a post-pandemic...

April 2, 2023

Lawmakers ask Mark Zuckerberg to show how Facebook, Instagram are...

August 16, 2024

Walmart to close 51 clinics as it shutters its entire...

May 1, 2024

Toyota recalling 1.12 million vehicles over potential air bag issue

December 21, 2023

These retailers will take over Bed Bath & Beyond’s ‘top-notch’...

June 30, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Dick’s Sporting Goods stands by full-year guidance — even with tariffs looming

      May 28, 2025
    • Top Sectors to Watch + The 18 SMA Setup Every Trader Should Know

      May 28, 2025
    • Macy’s CEO says retailer will hike some prices as tariffs cut into profits

      May 28, 2025
    • 23andMe to delist from Nasdaq, deregister with SEC

      May 28, 2025
    • Walmart fined for shipping realistic toy guns to New York, violating state law

      May 28, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,763 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,449 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,427 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,305 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,101)
    • Investing (538)
    • Stock (2,576)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Dick’s Sporting Goods stands by full-year guidance — even with...

      May 28, 2025
    • Top Sectors to Watch + The 18 SMA Setup Every...

      May 28, 2025
    • Macy’s CEO says retailer will hike some prices as tariffs...

      May 28, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,101)
    • Investing (538)
    • Stock (2,576)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Tesla CEO Elon Musk says he...

    May 25, 2024

    Social Security checks are about to...

    December 20, 2023

    Hologram Announces its Next-Generation Hyper SIM

    February 25, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here