Go To Zelle

This Week in Blunders – Dec. 15-21

“OK, boys; let's go make a withdrawal.” – John Dillinger

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Bank of America, JPMorgan Chase and Wells Fargo have lost $870 million through their low-security Zelle app, according to the Consumer Financial Protection Bureau, which filed a lawsuit against them on Friday for “allowing fraud to fester.”

The complaint – which also names the payment network’s operator, Early Warning Systems – claims that the banks rushed the app to market in 2017 to compete with Venmo and Cash App. In the mad scramble, they neglected customer safeguards.

The lawsuit claims the banks also denied assistance to hundreds of thousands of consumers who filed fraud complaints. Some were told to just contact the people who ripped them off to resolve the problem.

“Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” said CFPB Director Rohit Chopra.

The action comes in the waning days of the Biden administration. It will be astonishing if it survives the next administration.

Zelle blames politics and said it will fight.

“The CFPB’s misguided attacks will embolden criminals, cost consumers more in fees, stifle small businesses and make it harder for thousands of community banks and credit unions to compete,” said Zelle spokeswoman Jane Khodos.

Yeah, and for all you thieving hackers out there: You can all just go to Zelle.

“Well, well, well. Just ring up Zelle.” (Illustration: AI)

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