X

CFPB Drops Case Over Zelle

"In a time when fraud and scam activity is surging ... we look forward to moving past finger-pointing and political grandstanding and instead working constructively with policymakers to counter the root causes of these threats."
Lindsey Johnson, Consumer Bankers Association President
"In a time when fraud and scam activity is surging ... we look forward to moving past finger-pointing and political grandstanding and instead working constructively with policymakers to counter the root causes of these threats."
Lindsey Johnson, Consumer Bankers Association President

The CFPB dismissed its action against several banks and the operator of the Zelle peer-to-peer payments network for failing to implement adequate anti-fraud measures.

The Notice of Dismissal before the US District Court for the District of Arizona, dropped the agency's action against Early Warning Services, LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., with prejudice.

The CFPB alleged that the defendants "failed to institute meaningful fraud prevention measures," despite marketing Zelle as a safe and secure payment option. The CFPB claimed that the defendants failed to restrict fraudulent account activity, ignored clear indicators of fraud and refused to reimburse defrauded consumers—often instructing them to attempt to recover funds directly from the perpetrators.

Primary Sources

  1. US District Court for the District of Arizona: Plaintiff’s Notice of Dismissal: CFPB v. Early Warning Services, LLC, et al.
  2. US District Court for the District of Arizona: Complaint: CFPB v. Early Warning Services, LLC; Bank of America, N.A.; JPMorgan Chase Bank, N.A.; and Wells Fargo Bank, N.A.

Tags

Regulated Activities
Payments
Regulated Entities
Banking Entities
Body of Law
Banking Law
Jurisdiction
US - Federal
Organization
US Banking Regulators
Sub-Author
CFPB