Zelle Faces NY Lawsuit Claiming Its Lack Of Safety Features Let Criminals Steal Over $1 Billion From Consumers

Zelle was sued on Wednesday by New York Attorney General Letitia James, according to Reuters. The lawsuit alleged that the payment platform’s refusal to adopt basic safety measures enabled fraudsters to steal over $1 billion from consumers. Zelle, launched in 2017, competes with payment apps like PayPal’s Venmo and Block’s Cash App. The complaint said parent-company Early Warning Services and its seven bank owners knew the platform was vulnerable for years but resisted safeguards, ignored complaints, and allowed fraudsters to remain. Common scams included hacking accounts, impersonating banks or utilities, and convincing victims to send money for nonexistent goods or services. Zelle said scams originate from criminals tricking users into sending money, not from the platform, and warned that holding it liable could raise consumer fees.