Financial Times reported today that the Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Zelle payment network operator and three major US banks.
The British newspaper confirmed that these banks dominate financial transactions and failed to adequately investigate fraud complaints and compensate victims.
Millions of Dollars in Losses:
According to the report, the three banks involved are JPMorgan Chase, Bank of America, and Wells Fargo, with customers losing over $870 million since Zelle’s launch in 2017.
The article highlighted that Zelle, a peer-to-peer payment network run by Early Alarm Services, a company owned by the banks, allows for instant payments between consumers and other businesses. It quickly grew to become the largest service of its kind in the US.
Zelle Service:
The report pointed out that in recent years, Democratic lawmakers have criticized the banks for financial crimes taking place on the Zelle platform.
Rohit Chopra, CFPB Director, stated: “The largest banks in the country felt threatened by competing payment apps. As a result, they rushed to introduce Zelle, failing to implement the necessary safeguards.”
He added: “Zelle has become a goldmine for scammers, while victims are often left to handle the situation on their own.”
According to the report, the recent measures are not unique to Libya alone, indicating a global trend in tightening financial oversight and addressing fraud.
