The Consumer Financial Protection Bureau sued JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. along with the parent company of Zelle alleging the firms rushed a peer-to-peer payment network to market without adequate consumer protections.
“By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” said CFPB Director Rohit Chopra in a statement Friday.
A Zelle spokesperson said the CFPB’s lawsuit is legally and factually flawed while a representative for JPMorgan called them “a last-ditch effort in pursuit of their political agenda.”
Bank of America said more than 99.95% of transactions go through without issue and it strongly disagreed with the agency’s move.
A representative for Wells Fargo declined to comment.
JPMorgan, Wells Fargo and Bank of America are the largest institutions participating in the Zelle network, according to the complaint, accounting for 73% of its activity last year.
The CFPB claimed that fraud complaints weren’t addressed, with consumers largely denied relief when they went to their banks, according to the federal lawsuit filed in Arizona.
Both JPMorgan and Wells Fargo previously disclosed that the consumer agency was investigating their handling of Zelle transactions, which the banks rely on to encourage customers to engage with them more online.
