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Title: New York Sues Zelle Parent Company, Alleging It Enabled Fraud

Link: https://yro.slashdot.org/story/25/08/13/21332...

New York Attorney General Letitia James has sued Zelle's parent company,
Early Warning Services, alleging it knowingly enabled over $1 billion in
fraud from 2017 to 2023 by failing to implement basic safeguards. CNBC
reports: "EWS knew from the beginning that key features of the Zelle network
made it uniquely susceptible to fraud, and yet it failed to adopt basic
safeguards to address these glaring flaws or enforce any meaningful anti-
fraud rules on its partner banks," James' office said in the release. The
lawsuit alleges that Zelle became a "hub for fraudulent activity" because the
registration process lacked verification steps and that EWS and its partner
banks knew "for years" that fraud was spreading and did not take actionable
steps to resolve it, according to the press release. James is seeking
restitution and damages, in addition to a court order mandating that Zelle
puts anti-fraud measures in place. "No one should be left to fend for
themselves after falling victim to a scam," James said in the release. "I
look forward to getting justice for the New Yorkers who suffered because of
Zelle's security failures." A Zelle spokesperson called the lawsuit a
"political stunt to generate press" and a "copycat" of the CFPB lawsuit,
which was dropped in March. "Despite the Attorney General's assertions, they
did not conduct an investigation of Zelle," the spokesperson said. "Had they
conducted an investigation, they would have learned that more than 99.95
percent of all Zelle transactions are completed without any report of scam or
fraud -- which leads the industry."

Read more of this story at Slashdot.

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