• The CFPB filed a lawsuit against JPMorgan Chase, Wells Fargo and Bank of America, accusing them of negligence in overseeing the Zelle payment network, resulting in $870 million in fraud losses.
• The complaint alleges the banks launched Zelle without proper safeguards and ignored consumer reports of fraud, prioritizing profits over consumer protection.
• JPMorgan, Wells Fargo and BofA together account for 73 percent of all Zelle transactions, highlighting their significant market dominance and responsibility in the network.
• The CFPB’s case is backed by hard data, revealing that one out of every 200 transactions results in fraud, which has financially devastated many households.
• The lawsuit aims to hold banks accountable for consumer protection and ensure future transactions are secure, setting a precedent for financial institutions to prioritize customer safety.

The Consumer Financial Protection Bureau (CFPB) has dropped a massive lawsuit on the heads of JPMorgan Chase, Wells Fargo and Bank of America (BofA).

The federal regulator alleges that these banks were willfully negligent in the implementation and oversight of the increasingly popular Zelle payment network, leading to a fraud epidemic that has cost consumers over $870 million.

The CFPB’s complaint, filed on Dec. 20, paints a damning picture of a rushed launch, followed by a stunning lack of action when consumers began reporting fraud. The banks, it seems, turned a blind eye to the mounting fraud problems, caring more about profits and market share than protecting their customers.

JPMorgan, Wells Fargo and BofA are no mere players in the Zelle ecosystem; they’re the powerhouses. Together, they account for a staggering 73 percent of all transactions on the network. That’s the kind of market dominance that should come with a hefty responsibility to protect consumers, not sidestep regulations to maximize profits.

According to the CFPB, the three defendants launched Zelle without effective safeguards against fraud and when consumers reported issues, largely refused to help them. One might think that when a customer is defrauded, the bank should be their first line of defense. Not so much, if the banks have anything to say about it.

The CFPB’s case isn’t just based on anecdotal evidence; it’s backed by hard data. Since Zelle’s launch in 2017, more than $870 million has been lost to fraud, a staggering amount that has devastated countless households. And yet, these banks continue to claim that more than 99.95 percent of transactions go through without incident. (Related: CFPB orders Wells Fargo to pay $3.7 billion for gross mismanagement of auto loans, mortgages and deposit accounts.)

Let’s break that down: for every 200 transactions, one person is left in the cold. That might sound like a small number, but when we’re talking about $870 million, it translates to a catastrophic failure of trust.

Banks claim CFPB overreaches as authority

The victims didn’t just lose a few bucks; they lost their life savings, their retirement funds and their kids’ college accounts.

The banks’ responses are predictably defensive. Bank of America calls the lawsuit an attempt to impose “huge new costs” on financial institutions. As if the $870 million in losses wasn’t enough of a cost to consumers.

JPMorgan, sticking to its defensive legal playbook, declares the CFPB’s case as “overreaching its authority.” Wells Fargo, unsurprisingly, won’t comment. Early Warning, the fintech behind Zelle, calls the lawsuit “legally and factually flawed.” Funny, because it’s their network that’s riddled with gaping vulnerabilities.

What would it take for these banks to finally put their customers first? How many more families will be financially ruined before they take real, meaningful action to protect those using their services?

The CFPB’s lawsuit is a crucial step in holding these banks accountable. It’s not just about recovering lost funds; it’s about ensuring that future transactions are secure and that consumers are protected. Banks like JPMorgan, Wells Fargo and Bank of America are far more than just financial institutions; they’re custodians of public trust. It’s time they start acting like it.

Observers are hoping this lawsuit sets a powerful precedent. If it does, maybe, the next time one thinks about using Zelle – or any other payment network – he/she won’t have to worry about getting scammed. The banks may pay lip service to consumer protection, but their actions speak louder than words.

Visit MoneySupply.news to read more stories like this.

Watch the video below where finance expert Lynette Zhang talks about BofA, JPMorgan, Wells Fargo and 20 other banks to give away people’s money.

This video is from the What is happening channel on Brighteon.com.

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Sources include:

Finance.Yahoo.com

Files.ConsumerFinance.gov

Brighteon.com