The American Consumer Financial Protection Bureau (CFPB) announced that JPMorgan Chase, Wells Fargo and Bank of America customers lost a total of $870 million due to fraud on Zelle.
Lawsuit Against Giant Banks
The CFPB is suing the three major banks and Zelle’s parent company for failing to protect users from widespread fraud on the popular payment network. According to the lawsuit, hundreds of thousands of customers have filed fraud complaints and often get no help.
The CFPB alleged that banks limited identity verification measures, allowed fraudsters to switch between banks, and ignored customer warnings. It is also stated that they leave customers alone when fraud occurs. We see criticism that cryptocurrency exchanges are a source of fraud every time. It has been mentioned many times in the US Senate that the cryptocurrency world is perfect for fraudsters. However, the world’s largest banks seem to have failed to protect their customers from fraud worth hundreds of millions of dollars. This shows how much negative discrimination the criticisms against cryptocurrencies include.
Statements of Institutions
CFPB Director Rohit Chopra stated that banks launched Zelle in a hurry to deal with competitive payment practices and that the speed did not adequately address security concerns.
“As a result of banks not taking proper security measures, Zelle has become a gold mine for scammers, and victims are often left to deal with their situation on their own.”
Zelle stated that he was ready to fully defend the case and claimed that the case contained legal errors.
“The CFPB’s attacks against Zelle are too flawed to be legal or factual. “The timing of this case is driven by political factors unrelated to Zelle.”
JPMorgan Chase said the CFPB could file a lawsuit against it over the Zelle investigation and that the agency “did more than the law required.”
As a result, the CFPB’s lawsuit reveals that major banks do not adequately ensure security measures in their digital payment systems and fail to protect their customers from fraud. This shows that financial institutions should pay more attention to user security in digital services.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
