Early Warning Services, LLC; Bank of America, N.A.; JPMorgan Chase Bank, N.A.; Wells Fargo Bank, N.A
On December 20, 2024, the Bureau filed a lawsuit against Early Warning Services, LLC (EWS), Bank of America, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., claiming they failed to safeguard the Zelle network from fraud and other defects, which resulted in hundreds of millions of dollars in consumer losses. EWS is a financial technology and consumer reporting company headquartered in Scottsdale, Arizona and is co-owned by seven of the largest banks in the United States, including Bank of America, JPMorgan Chase, and Wells Fargo. EWS designed and operates the Zelle network and app, which is now the most widely available peer-to-peer payment network in the United States. In 2017, the defendants rushed to launch Zelle to compete with other peer-to-peer money transfer platforms and to leverage their existing consumer deposit base by offering money transfer services directly to their customers. The Bureau alleges that the defendants violated the Consumer Financial Protection Act’s (CFPA) prohibition on unfair acts or practices by failing to take timely, appropriate, and effective measures to prevent, detect, limit, and address fraud on the Zelle Network. The complaint also alleges that Bank of America, JPMorgan Chase, and Wells Fargo violated the Electronic Fund Transfer Act and its implementing Regulation E for failing to conduct reasonable investigations of notices of errors submitted by consumers regarding Zelle transactions; and failing to properly treat incorrect and unauthorized Zelle transfers as errors under the law. The Bureau seeks, among other things to bring the defendants into compliance with the law, consumer redress, and civil money penalties.
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CFPB Sues JPMorgan Chase, Bank of America, and Wells Fargo for Allowing Fraud to Fester on Zelle