Allegations and Response
The (CFPB) filed a lawsuit against and its co-owning banks—, , and —accusing them of failing to protect consumers from over $870 million in fraud losses since Zelle's launch in 2017.
Zelle and its banks rebutted the claims, asserting the lawsuit is meritless and politically motivated. Zelle emphasized its efforts to combat fraud and its reimbursement policies, highlighting a decrease in fraud reports and an increase in transaction volume.
Legal and Regulatory Context
The CFPB's lawsuit seeks to halt alleged unlawful conduct, obtain redress for affected consumers, and impose a civil monetary penalty. It criticizes Zelle's design and the banks' failure to implement effective fraud prevention measures.
This legal action is part of broader regulatory efforts to tighten control over digital payment platforms, amid concerns over their vulnerability to fraud and the adequacy of consumer protections.