JPMorgan, Wells Fargo, BofA facing federal lawsuit over Zelle payment network fraud

Core Points - A federal regulator has sued JPMorgan Chase, Wells Fargo, and Bank of America for failing to protect consumers from fraud on the Zelle payment network, violating consumer financial laws [1][10] - The lawsuit claims that the banks did not take meaningful action to address fraud issues on Zelle for years after its launch [2][9] - The Consumer Financial Protection Bureau (CFPB) is seeking an unspecified amount of money for refunds, damages, and penalties [3] Company Responses - Bank of America disagrees with the lawsuit, stating it would impose "huge new costs" on banks and credit unions offering Zelle [5] - Wells Fargo declined to comment on the lawsuit [14] - JPMorgan did not immediately respond to requests for comment [7] Zelle Usage and Impact - In the first half of 2024, Zelle users transferred $481 billion across more than 1.7 billion transactions [8] - The CFPB claims that customers of the three banks have lost over$870 million due to fraud on Zelle since its launch [11] - The three banks account for 73% of Zelle's activity, with more than 99.95% of transactions going through without incident [12][13] Background on Zelle - Zelle has become one of the most widely used peer-to-peer payment networks in the U.S. since its launch in 2017, with over 143 million users [15] - Early Warning Services, a fintech company operating Zelle and owned by seven U.S. banks, is also named as a defendant in the lawsuit [4]