The US Consumer Financial Protection Bureau (CFPB) on Friday sued JPMorgan Chase, Bank of America and Wells Fargo along with the electronic transaction company Zelle for starting a peer-to-peer payment network without first having adequate measures in place to protect their users.
The CFPB has accused Zelle and the three entities of having limited methods for verifying identities, allowing fraudsters to access the system, ignoring warnings that could have detected fraud and abandoning customers after they had been deceived. The CFPB has also stated that complaints filed by consumers were not attended to.
“By failing to put in place adequate safeguards, Zelle became a goldmine for fraudsters, often leaving victims to fend for themselves,” CFPB Director Rohit Chopra said in a statement reported by Bloomberg.
Zelle, for its part, has described the supervisor’s actions as “legally and factually wrong” given that they were allegedly driven by “political motives.”
