In reversal under Trump, Feds drop Zelle fraud suit against Bank of America, Wells Fargo
Two banking giants with a major presence in Charlotte are no longer facing a lawsuit from a federal consumer protection agency over customers getting scammed on Zelle.
The Consumer Financial Protection Bureau dropped its case Tuesday against the peer-to-peer payment network along with Charlotte-based Bank of America and Wells Fargo, which has its largest employment hub in the city. JPMorgan Chase was also named in the lawsuit filed in December.
Zelle is co-owned by the banks listed in the lawsuit and several other large financial institutions such as Capitol One, U.S. Bank and Charlotte-based Truist.
Last year, the consumer agency claimed that customers lost more than $870 million in seven years after Zelle was founded in 2017. CFPB also claimed Zelle’s operator, Early Warning Services, rushed the network to the public to compete against other apps such as Venmo and CashApp without the right safeguards in place for consumers.
CFPB’s backing off from legal action comes in the wake of widespread budget cuts by the Trump administration. What’s more The consumer agency was ordered to stop work after Russell Vought became the director of the Office of Management and Budget and acting head of the CFPB, according to multiple media reports.
More claims about Zelle
After getting scammed, hundreds of thousands of consumers filed complaints but were denied help from the three banks, according to the CFPB. The suit stated that some people were told to contact the scammers to get their money back.
Since 2017, Bank of America had 210,000 customers who lost more than $290 million from fraud. San Francisco-based Wells Fargo had $220 million in fraud losses by 280,000 customers. The fraud impacting Chase Bank customers totaled $360 million for 420,000 users.
Along with fraud, the CFPB claimed the banks violated federal laws for electronic fund transfers. The agency also said Bank of America and Chase sent customers’ transfers to the wrong recipient because of errors and inaccuracies in Zelle’s network.
More than 2,200 banks and credit unions offer Zelle to 143 million users in the U.S., the suite mentioned. Customers transferred $481 billion through 1.7 billion transactions.
In December, Bank of America defended its relationship with Zelle. The bank said more than 99.5% of transactions across the network happened without incident.The bank did not respond to requests for comment on the end of the suit.
Wells Fargo referred to EWS’s statement about the lawsuit being dropped.
“We welcome the CFPB’s decision to drop its lawsuit against the Zelle network,” EWS stated. “As we’ve said before, this lawsuit was without merit, and legally and factually flawed.
The network said its looking forward to continue with providing service to more than 150 million consumers and small business users.
This story was originally published March 5, 2025 at 11:57 AM with the headline "In reversal under Trump, Feds drop Zelle fraud suit against Bank of America, Wells Fargo."
