New York Attorney General Sues Early Warning Services Over Zelle Fraud Allegations

In a bold move, New York Attorney General Letitia James has initiated a lawsuit against Early Warning Services (EWS), the entity behind the Zelle payments network. The lawsuit, filed on Wednesday, accuses EWS of facilitating a massive fraud scheme amounting to $1 billion, by neglecting to implement essential security measures from 2017 to 2023.

According to the suit, EWS and its partner banks, including major names like Bank of America, Capital One, and JPMorgan Chase, were fully aware of the scams targeting Zelle users but chose not to act. The complaint highlights the lack of critical verification steps in Zelle's design, branding it as a "hub for fraudulent activity."

"EWS was aware from the outset that the Zelle network's features made it particularly vulnerable to fraud," stated James's office. "Despite this knowledge, EWS failed to enforce basic anti-fraud protocols or hold its partner banks accountable."