New York Sues Zelle Parent Company, Alleging It Enabled Fraud (cnbc.com)
- Reference: 0178667794
- News link: https://yro.slashdot.org/story/25/08/13/2133239/new-york-sues-zelle-parent-company-alleging-it-enabled-fraud
- Source link: https://www.cnbc.com/2025/08/13/new-york-letitia-james-zelle-lawsuit.html
> "EWS knew from the beginning that key features of the Zelle network made it uniquely susceptible to fraud, and yet it failed to adopt basic safeguards to address these glaring flaws or enforce any meaningful anti-fraud rules on its partner banks," James' office said in the release. The lawsuit alleges that Zelle became a "hub for fraudulent activity" because the registration process lacked verification steps and that EWS and its partner banks knew "for years" that fraud was spreading and did not take actionable steps to resolve it, according to the press release.
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> James is seeking restitution and damages, in addition to a court order mandating that Zelle puts anti-fraud measures in place. "No one should be left to fend for themselves after falling victim to a scam," James said in the release. "I look forward to getting justice for the New Yorkers who suffered because of Zelle's security failures."
A Zelle spokesperson called the lawsuit a "political stunt to generate press" and a "copycat" of the CFPB lawsuit, which was [2]dropped in March .
"Despite the Attorney General's assertions, they did not conduct an investigation of Zelle," the spokesperson said. "Had they conducted an investigation, they would have learned that more than 99.95 percent of all Zelle transactions are completed without any report of scam or fraud -- which leads the industry."
[1] https://www.cnbc.com/2025/08/13/new-york-letitia-james-zelle-lawsuit.html
[2] https://www.npr.org/2025/03/04/nx-s1-5317679/cfpb-drops-zelle-lawsuit
"Fraud"? (Score:2)
By "Fraud", I assume she means it's more difficult to impose excessive NY taxes upon.
Next on the list - US Mint (Score:3, Funny)
Because geniuses gave cash to scammers, the US Mint should be sued for all the same reason she listed against Zelle.
If Zelle loses, crypto is boned (Score:4, Insightful)
Crypto is scammer paradise. Zelle to a far lesser degree.
How Does She Have Such a Warped View Of The World? (Score:3)
> No one should be left to fend for themselves after falling victim to a scam
Perhaps. But, that's life. We have to guard ourselves against being scammed. And, when we do get scammed there's no one to help but ourselves. Not even Letitia James.
Why doesn't she prosecute the scammers rather than suing the conduit? Does she sue phone companies for phone scams?
Disingenuous arithmetic (Score:5, Interesting)
Zelle reported 3.6 billion transactions in 2024. A 0.05% error rate is 1 in 2000, so this looks like an indirect admission that 1.8 million transactions were affected by scam or fraud. [1]Zelle 2024 [ffnews.com]
[1] https://ffnews.com/newsarticle/paytech/zelle-shatters-records-with-1-trillion-sent-in-a-single-year/
Verify what? (Score:3, Interesting)
You're registering with a bank account, it's not like you can do it anonymously. Making instant bank transfers easy to use is just inherently sensitive to fraud, there's a near infinite amount of fresh money mules. Allow people to use Fednow transfers with QR codes and the exact same will happen.
Trivial to initiate instant payments are just broken as a concept. Automated instant payments should be restricted to vetted recipients and physical transactions, for internet transactions with private individuals just keep the money in escrow for a while. Not to allow vague blocks or charge backs, but just a little time for law enforcement to get involved where needed with a court order.
Re: (Score:2)
i don't know man, we're pretty happy here in Argentina with instant bank transfers between any bank in the country.
No fees to pay Visa, no payment processor withholding my money for days or weeks for no reason, and no bogus chargebacks from buyers.
Re: (Score:3)
If you live in NYC let me know if you got your money's worth from all her lawsuits.
Re:Letitia James (Score:5, Informative)
Losing? In MAGA's delusional world, maybe. In reality she's won against the orange pedophile. She won against that illegal immigrant from South Africa. She's winning her fraud case against Citi. She won against the NRA. She won against DOT withholding funding conditional on immigration issues. She's been winning cases against state agencies for not doing their duty for low-income people. She won against the pedophile again when she secured Congressionally secured funding from the Department of Education. She won against the Roman Catholic Diocese of Albany which pulled the pension for over 1,000 employees and is required to restore that pension.
Doesn't sound like losing, does it?
Re: (Score:2, Informative)
By losing, you mean winning against trump?
> Donald Trump, Adult Sons, and Former Executives Ordered to Pay More Than $450 Million They Fraudulently and Illegally Obtained Donald Trump Banned from Serving as an Officer or Director of Any New York Company for Three Years
> Trump was ordered to pay more than $350m in damages in the civil fraud case, which is currently going through the appeals process. Trump was criminally convicted for falsifying business records in a separate case. Last year, he was found guilty on 34 counts for fraudulently classifying reimbursements for a hush-money payment made to adult-film actress Stormy Daniels.