CFPB Sues Major US Banks Over Alleged Zelle Fraud, Claiming Consumer Losses of $870 Million

Consumer watchdog agency CFPB has sued three major banks, alleging they failed to protect consumers from fraud tied to Zelle transactions.

Consumer Financial Protection Bureau Director Rohit Chopra testifies before the Senate Banking, Housing and Urban Affairs Committee in Washington on April 26, 2022. Win McNamee/Getty Images

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against three of the nation’s largest banks—Bank of America, JPMorgan Chase, and Wells Fargo—accusing them of failing to protect consumers from alleged widespread fraud on payments platform Zelle.

The lawsuit, announced on Dec. 20, also targets Early Warning Services, which operates Zelle, a peer-to-peer payment network. It accuses the operator and the banks—which co-own Zelle—of failing to implement effective consumer safeguards when rushing it to market to compete against growing payment apps such as Venmo and CashApp, leading consumers to suffer more than $870 million in losses.