New York claims Zelle’s shoddy security enabled a billion dollars in scams
The New York Attorney General, Letitia James, is suing the banks behind the payment platform Zelle, alleging that its shoddy security enabled over $1 billion in scams between 2017 and 2023. The lawsuit claims that Zelle was rushed to market, making it "an obvious conduit for fraudulent activity" due to a registration process that lacked important verification steps. The lawsuit also alleges that Zelle's owner, Early Warning Services (EWS), failed to adopt basic safeguards, ensure timely reporting of customer complaints, and provide reimbursement for certain scams. The Attorney General is seeking restitution and damages for all New Yorkers harmed by the platform's security failures. Zelle has disputed the claims, stating that the lawsuit is a "political stunt" and that the platform leads the fight against fraud and scams in the US.
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