New York Attorney General Letitia James has filed a lawsuit against banks behind the Zelle payment platform, alleging its insecure design enabled over $1 billion in scams from 2017 to 2023. The suit claims Early Warning Services (EWS), owned by major banks, rushed Zelle to market without proper fraud safeguards, including weak registration verification allowing scammers to impersonate officials. Despite warnings, EWS allegedly failed to act promptly on fraud reports or reimburse victims timely, falsely promoting Zelle as safe. Zelle denies the accusations, calling the lawsuit a political stunt. Attorney General James seeks restitution for affected New Yorkers and damages for Zelle's security failures.
