CFPB sues big banks behind money transfer app Zelle over lax oversight, fraud

JPMorgan Chase, Wells Fargo Bank, Bank of America, and the company behind online money transfer app Zelle were sued Friday by the Consumer Financial Protection Bureau for allegedly failing to safeguard Zelle’s network and causing customers to lose $870 million, the CFPB alleged.

Zelle, designed by Arizona-based Early Warning Systems, which is owned by the nation’s seven largest banks, was created with the aim to gain entrance into the online “peer-to-peer” money transfer market. The other owners include Capitol One, PNC, Truist, and U.S. Bank.

“By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” CFPB Director Rohit Chopra said.