NY AG sues Zelle operator for ‘enabling widespread fraud’

New York Attorney General Letitia James has sued Early Warning Services, a company owned and controlled by “a group of the largest banks in the United States” that was tasked with developing and operating the electronic payment platform Zelle, for “failing to protect its users from massive amounts of fraud.” EWS is a financial technology company owned and controlled by banks including JPMorgan Chase (JPM), Bank of America (BAC), Capital One (COF) and Wells Fargo (WFC), the AG noted. “The OAG’s investigation revealed that EWS and its partner banks knew for years that fraud was spreading on Zelle and failed to take meaningful action to stop it. When participating banks received complaints from Zelle users about fraud, EWS allowed banks to report that fraud to EWS long after it occurred, which enabled bad actors to scam additional consumers,” the AG stated. “No one should be left to fend for themselves after falling victim to a scam. I look forward to getting justice for the New Yorkers who suffered because of Zelle’s security failures,” said Attorney General James.