Over $1B stolen by scammers: AG James sues Zelle for 'enabling widespread fraud'

NEW YORK - New York Attorney General Letitia James is suing Zelle's parent company for "enabling widespread fraud."

‘Massive amounts’ of fraud

What we know:

James alleges that Zelle's parent company, Early Warning Services, failed to protect the platform's users from "massive amounts" of fraud.

An investigation by the attorney general's office revealed that Early Warning Services designed Zelle without safety features that would have protected users from scammers, who have stolen over $1 billion between 2017 and 2023.

"No one should be left to fend for themselves after falling victim to a scam," James stated in a press release. "I look forward to getting justice for the New Yorkers who suffered because of Zelle’s security failures."

James is not only seeking restitution for damaged New Yorkers, but also a court order that would mandate Zelle to maintain anti-fraud measures to protect its users in the future.

The lawsuit in its entirety can be read below:

The backstory:

A similar lawsuit filed by the Consumer Financial Protection Bureau (CFPB) in December 2024 was abandoned after the change in the federal administration. The CFPB not only sued Zelle's parent company, but also JPMorgan Chase, Bank of America and Wells Fargo over the same issue.