Sign in Subscribe
Attorneys general

NY AG Sues Zelle Operator for Alleged Failure to Protect Users from Fraud

Strategic Insights

— 1 min read

New York Attorney General Letitia James is suing the company that operates Zelle, Early Warning Services LLC (EWS), for allegedly creating a payment platform highly susceptible to fraud and failing to take adequate measures to stop it. The company, owned and controlled by a group of major banks, including JPMorgan Chase and Wells Fargo, is accused of violating New York law by allowing scammers to steal over $1 billion from users between 2017 and 2023. James is seeking restitution and damages, along with a court order mandating EWS maintain necessary anti-fraud safeguards.

Key Takeaways:

  • The lawsuit alleges that Early Warning Services LLC (EWS) designed Zelle without critical safety features, making it vulnerable to fraud, and failed to adopt basic safeguards to address these flaws.
  • Between 2017 and 2023, scammers allegedly stole over $1 billion from Zelle users, with the Consumer Financial Protection Bureau (CFPB) estimating that the true number of victims may be higher.
  • The AG claims that EWS received reports of fraud but failed to promptly remove the scammers from the Zelle network or require banks to reimburse consumers for certain scams.
  • When EWS developed basic safeguards to address these issues as early as 2019, it failed to adopt them, and instead, allowed scammers to continue targeting users.
  • The banks controlling EWS, including JPMorgan Chase, Bank of America, Capital One, and Wells Fargo, launched Zelle to compete with payment apps such as Venmo and PayPal.
  • The AG claims that EWS prioritized attracting new users through a simple registration process and quick transfers, leaving consumers vulnerable to scammers.

Statistics:

  • Over $1 billion allegedly stolen from Zelle users between 2017 and 2023.
  • Scammers used Zelle to realize millions of dollars in losses for New Yorkers.
  • The CFPB estimates that the true number of victims may be higher than reported.

Sources:

  • James, L. (2025, February). NY AG Sues Zelle Operator for Alleged Failure to Protect Users from Fraud. BridgeTower Media.
  • James, L. (2025). Lawsuit Against Early Warning Services LLC (EWS). New York Attorney General's Office.
  • Consumer Financial Protection Bureau (2025). Complaint Against Early Warning Services LLC (EWS).

Read more