New York says Zelle de Zelle’s security has allowed a billion dollars in scams

Prosecutor General of New York Letitia James continues the banks behind Zelle claims that their payment platform has made it possible to “massive quantities of fraud” which caused more than a billion dollars to customers between 2017 and 2023. The trialJames alleys that Zelle was precipitated on the market, causing a design that made the platform “an obvious conduit for fraudulent activity”.

Early Warning Services (EWS), a company belonging to large institutions such as Bank of America, Capital One, Jpmorgan Chase, Wells Fargo and others, Launched Zelle in 2017 To allow customers to send money from their bank account to other users on the platform. However, James affirms that the EWS “knew from the start that the main characteristics of the Zelle network made it only sensitive to fraud” and “failed to adopt basic guarantees”.

One of the alleged questions highlighted by James’ trial includes a registration process which “lacked major verification stages” which allowed the crooks to register with the help of misleading email addresses, which they could use to present themselves as an employee or government of the government to encourage Zelle customers to send them money that they could not recover. After the government’s pressure, Zelle started to reimburse victims of imprisonment scams in 2023.

In addition, James says that the EWS has not taken care that banks have declared complaints from customers concerning fraud in a timely “and falsely announced service as a” safe “money transfer tool. “Even when EWS has received fraud reports, he failed to quickly withdraw fraudsters from the Zelle network or demand that banks reimburse consumers for certain scams,” said James.

Zelle spokesperson Eric Blankenbaker rejected these claims in a declaration The penisSaying that Zelle “leads the fight to stop fraud and scams” in the United States. “This trial is a political blow to generate press, not progress,” explains Blankenbaker. “The Attorney General wants to give criminals a plan for guaranteed payments without consequences, opening the valves to more scams, no less. It is bad policy and puts consumers more at risk. ”

The Attorney General James claims that the EWS has violated New York law and requests a return and damage to all New Yorkers injured by scams on Zelle. “I can’t wait to obtain justice for New Yorkers who suffered due to Zelle’s security failures,” James said in the press release.