{"id":80313,"date":"2025-08-13T19:02:07","date_gmt":"2025-08-13T19:02:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/80313\/"},"modified":"2025-08-13T19:02:07","modified_gmt":"2025-08-13T19:02:07","slug":"new-york-claims-zelles-shoddy-security-enabled-a-billion-dollars-in-scams","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/80313\/","title":{"rendered":"New York claims Zelle\u2019s shoddy security enabled a billion dollars in scams"},"content":{"rendered":"

New York Attorney General Letitia James is suing the banks behind<\/a> Zelle over claims that their payment platform enabled \u201cmassive amounts of fraud\u201d that caused customers to lose more than $1 billion between 2017 and 2023. In the lawsuit<\/a>, James alleges Zelle was rushed to market, resulting in a design that made the platform \u201can obvious conduit for fraudulent activity.\u201d<\/p>\n

Early Warning Services (EWS), a company owned by major institutions including Bank of America, Capital One, JPMorgan Chase, Wells Fargo, and others, launched Zelle in 2017<\/a> as a way to let customers send money from their bank account to other users on the platform. However, James claims EWS \u201cknew from the beginning that key features of the Zelle network made it uniquely susceptible to fraud\u201d and still \u201cfailed to adopt basic safeguards.\u201d<\/p>\n

One of the alleged issues highlighted by James\u2019 lawsuit includes a registration process that \u201dlacked important verification steps\u201d that enabled scammers to sign up using misleading email addresses, which they could use to pose as a government employee or business to trick Zelle customers into sending them money that they couldn\u2019t get back. Following government pressure, Zelle began paying back<\/a> victims of imposter scams in 2023.<\/p>\n

Additionally, James claims EWS did not ensure that banks reported customer complaints about fraud in a \u201ctimely\u201d manner and falsely advertised the service as a \u201csafe\u201d money transfer tool. \u201cEven when EWS did receive reports of fraud, it failed to promptly remove the fraudsters from the Zelle network or require banks to reimburse consumers for certain scams,\u201d James alleges.<\/p>\n

Zelle spokesperson Eric Blankenbaker pushed back on these claims in a statement to The Verge, saying Zelle \u201cleads the fight to stop fraud and scams\u201d in the US. \u201cThis lawsuit is a political stunt to generate press, not progress,\u201d Blankenbaker says. \u201cThe Attorney General wants to hand criminals a blueprint for guaranteed payouts with no consequences, opening the floodgates to more scams, not less. That\u2019s bad policy and puts consumers at greater risk.\u201d<\/p>\n

Attorney General James claims EWS violated New York law and is asking for restitution and damages for all New Yorkers harmed by scams on Zelle. \u201cI look forward to getting justice for the New Yorkers who suffered because of Zelle\u2019s security failures,\u201d James said in the press release.<\/p>\n","protected":false},"excerpt":{"rendered":"New York Attorney General Letitia James is suing the banks behind Zelle over claims that their payment platform…\n","protected":false},"author":2,"featured_media":80314,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[41],"tags":[165,3,1343,111,172,74],"class_list":{"0":"post-80313","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mobile","8":"tag-mobile","9":"tag-news","10":"tag-policy","11":"tag-politics","12":"tag-tech","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/80313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=80313"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/80313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/80314"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=80313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=80313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=80313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}