Major banks sued for failing to prevent fraud on Zelle
The Consumer Financial Protection Bureau said Friday it against three of the country바카라 게임 웹사이트s largest banks and the operator of Zelle, the most widely available peer-to-peer payment system, 바카라 게임 웹사이트for allowing fraud to fester바카라 게임 웹사이트 on that network.
CFPB estimates that hundreds of thousands of customers of JPMorgan Chase, Bank of America and Wells Fargo have lost more than $870 million since Zelle launched seven years ago.
Those three banks co-own Zelle, along with four other big U.S. banks: Capital One, PNC Bank, Truist and U.S. Bank.
바카라 게임 웹사이트The nation바카라 게임 웹사이트s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,바카라 게임 웹사이트 said CFPB Director Rohit Chopra in a statement. 바카라 게임 웹사이트By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.바카라 게임 웹사이트
CFPB notes that customers who filed fraud complaints 바카라 게임 웹사이트were largely denied assistance, with some being told to contact the fraudsters directly to recover their money.바카라 게임 웹사이트
What바카라 게임 웹사이트s more, CFPB says, the entities being sued did not properly investigate complaints or give consumers 바카라 게임 웹사이트legally required reimbursement for fraud and errors.바카라 게임 웹사이트
CFPB바카라 게임 웹사이트s suit, filed in the U.S. District Court for the District of Arizona where Zelle operator Early Warning Services is based, specifically alleges among other things that the banks failed to stop transfers when there were indications of fraud and failed to protect its own account owners from using Zelle to perpetrate fraud.
바카라 게임 웹사이트Defendants바카라 게임 웹사이트 failures resulted in millions of complaints about Zelle fraud at (JP Morgan Chase, Bank of America and Wells Fargo) alone, including complaints of over $290 million in fraud losses by 210,000 Bank of America customers, over $360 million in fraud losses by 420,000 Chase customers, and over $220 million in fraud losses by 280,000 Wells Fargo customers,바카라 게임 웹사이트 the complaint alleges.
In a press call Friday morning, an agency official said that while more than 2,200 financial institutions use Zelle, the three banks it names in the suit 바카라 게임 웹사이트control the overwhelming majority of activity on Zelle.바카라 게임 웹사이트
Defendant calls suit 바카라 게임 웹사이트meritless바카라 게임 웹사이트
In response to CFPB바카라 게임 웹사이트s complaint, Early Warning Services slammed the move, calling the suit 바카라 게임 웹사이트meritless.바카라 게임 웹사이트
바카라 게임 웹사이트The CFPB바카라 게임 웹사이트s attacks on Zelle are legally and factually flawed, and the timing of this lawsuit appears to be driven by political factors unrelated to Zelle,바카라 게임 웹사이트 Jane Khodos, a Zelle spokesperson at EWS, said in a statement.
바카라 게임 웹사이트Zelle leads the fight against scams and fraud and has industry-leading reimbursement policies that go above and beyond the law. The CFPB바카라 게임 웹사이트s misguided attacks will embolden criminals, cost consumers more in fees, stifle small businesses and make it harder for thousands of community banks and credit unions to compete,바카라 게임 웹사이트 Khodos added.
JPMorgan Chase spokesperson Patricia Wexler was similarly critical. 바카라 게임 웹사이트As 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,바카라 게임 웹사이트 Wexler said in an email. 바카라 게임 웹사이트It바카라 게임 웹사이트s a stunning demonstration of regulation by enforcement, skirting the required rulemaking process.바카라 게임 웹사이트
For its part, Bank of America asserted that incidents of fraud are rare and that 23 million of the bank바카라 게임 웹사이트s customers use Zelle. 바카라 게임 웹사이트More than 99.95 percent of transactions across the Zelle network go through without incident. When a client has an issue, we work directly with them,바카라 게임 웹사이트 said spokesperson Bill Halldin. 바카라 게임 웹사이트We strongly disagree with the CFPB바카라 게임 웹사이트s effort to impose huge new costs on the 2,200 banks and credit unions that offer the free Zelle service to clients.바카라 게임 웹사이트
Wells Fargo declined to comment.
Chance of the case surviving a change in administrations
The CFPB suit was filed in one of the last remaining weeks of the Biden administration. And it is widely expected that President-elect Donald Trump will name a new person to head the agency for his term in office. What that will mean for the Zelle suit is unclear. [Chopra said in testimony before the House Financial Services Committee earlier this month that while he was confirmed for a five-year term he respects that 바카라 게임 웹사이트the president can remove us at any time, any day.바카라 게임 웹사이트]
바카라 게임 웹사이트We normally would dismiss a lawsuit filed in the final weeks before an inauguration, but this could have legs given the populist leanings of Trump바카라 게임 웹사이트s coalition. Much will depend upon whom Trump picks as CFPB director,바카라 게임 웹사이트 said Jaret Seiberg, financial services policy analyst at TD Cowen Washington Research Group, in an email.
That said, Seiberg noted, banks may have a strong defense 바카라 게임 웹사이트as much of the fight is over authorized transactions that prove fraudulent. It is hard for us to see a court demanding banks stop transactions that consumers want to make.바카라 게임 웹사이트