CFPB Sues Major Banks Over Zelle Fraud Allegations

The Consumer Financial Protection Bureau (CFPB) has initiated legal action against Early Warning Services, LLC—the operator of the Zelle payment network—and three prominent banks: Bank of America, JPMorgan Chase, and Wells Fargo. The lawsuit alleges that these institutions failed to protect consumers from widespread fraud occurring on the Zelle platform. NPR

Key Allegations:

  • Consumer Losses: Since Zelle’s launch in 2017, customers of the implicated banks have reportedly suffered losses exceeding $870 million due to fraudulent activities on the platform. WSJ
  • Inadequate Safeguards: The CFPB contends that the banks and Early Warning Services rushed Zelle to market without implementing effective consumer protection measures, aiming to compete with other payment apps like Venmo and Cash App. WSJ
  • Neglect of Consumer Complaints: Despite receiving hundreds of thousands of fraud complaints, the banks allegedly failed to conduct proper investigations or provide legally required reimbursements to affected consumers. AP News

CFPB’s Position:

CFPB Director Rohit Chopra stated that the banks’ failure to implement proper safeguards made Zelle “a gold mine for fraudsters.” The bureau seeks to halt the alleged unlawful practices, secure redress and penalties, and obtain other relief for affected consumers. NPR

Implications for Consumers:

You may be entitled to compensation if you have experienced unauthorized transactions or fraud while using Zelle through your bank.

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Sauder Schelkopf has a nationally recognized litigation practice. The firm currently serves as court-appointed lead counsel in courts across the country.  The attorneys at Sauder Schelkopf have recovered over $1 billion on behalf of their clients and class members. Our firm was recognized by the Legal Intelligencer’s 2022 Professional Excellence Awards. The Legal Intelligencer’s Professional Excellence Awards honor Pennsylvania law firms and attorneys who have made a significant, positive impact on the legal profession. Our firm was named in the Litigation Departments of the Year (Specialty Area category; runner-up), an award that honors the best litigation practice in a small or mid-sized firm in Pennsylvania. This recognition was based on the firm’s 2021 litigation work and its important ongoing cases. LawDragon has recognized our attorneys in its list of the “500 Leading Plaintiff Consumer Lawyers” for 2022.  This list notes: “From the opioid epidemic to toxic substances and defective products, truck accidents to wildfires and sexual abuse, these are the lawyers who stand on the front line in individual lawsuits and class actions seeking justice.” Mr. Schelkopf was named to Pennsylvania’s Best Lawyers® 2022 for Class Actions/Mass Tort Litigation. The American Lawyer named Mr. Sauder to its 2021 Northeast Trailblazers. The honor recognizes 60 lawyers who are “truly agents of change.” It “recognizes professionals in the Northeast who have moved the needle in the legal industry.” The Legal Intelligencer named Mr. Sauder and Mr. Schelkopf in its 2020 Pennsylvania Trailblazers list recognizing 31 lawyers who “have taken extra measures to contribute to positive outcomes . . . and who are truly agents of change.” The Legal highlighted the firm’s innovative work on advocacy as class counsel in large institutional sex abuse cover-ups, women’s, and children’s rights. Our attorneys have also consistently been recognized by their peers being named to Pennsylvania SuperLawyer, a distinction held by the top 5% of attorneys in Pennsylvania.  The National Trial Lawyers Association has also selected our attorneys as the Top 100 Trial Lawyers in Pennsylvania.

We Want to Hear from You

You may be entitled to compensation if you have experienced unauthorized transactions or fraud while using Zelle through your bank. Contact the attorneys at Sauder Schelkopf by filling out the form on this page.