New York Attorney General Sues Zelle's Parent Company

New York's attorney general, Letitia James, sued Early Warning Services, the parent company of the Zelle payment platform, alleging that the company failed to protect users from fraud by not including critical safety features in Zelle's design.

The lawsuit claims that scammers were able to access peoples' accounts or trick users into sending money to bogus accounts that posed as official businesses. James cited an instance where a Zelle user was scammed out of $1,500 by someone posing as an employee of Con Edison who told the user that their electricity would be shut off unless they sent them money through Zelle.

"No one should be left to fend for themselves after falling victim to a scam," James said in a statement. "I look forward to getting justice for the New Yorkers who suffered because of Zelle's security failures."

Early Warning Services, which is owned by a group of U.S. banks, was previously sued by the Consumer Financial Protection Bureau, but that case was dropped after the Trump administration gutted the agency.

Zelle called James' lawsuit "a political stunt to generate press, not progress." The company stated that James should focus on stopping criminal activity and adherence to the law rather than making overreaching and meritless claims.