The United States Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against JPMorgan Chase, Bank of America and Wells Fargo for failing to protect consumers from alleged “widespread fraud” on the payments platform Zelle.The lawsuit, filed on Friday, was initiated as the watchdog moves ahead with a bold agenda in the final weeks of President Joe Biden’s Democratic administration in a bid to advance consumer protections before Republican President-elect Donald Trump overhauls the agency. The moves defy congressional Republicans, who have called for agencies to cease rule making.
The CFPB seeks to stop the alleged unlawful practices via Zelle, secure redress and penalties, and obtain other relief for consumers, it said in a statement.
“What they built became a goldmine for criminals,” making it easy for fraudsters to drain accounts while providing insufficient protections for consumers or making them whole for losses, CFPB Director Rohit Chopra told journalists at a briefing. “These banks broke the law by running a payments system that made fraud easy while refusing to help the victims.” Advertisement
The CFPB said the banks violated federal law through critical failures, alleging they left the door open to scammers, allowed repeat offenders to hop between banks, ignored red flags that could have prevented fraud and abandoned consumers after fraud occurred.
Zelle is a payments network owned by …
