New York Attorney General’s Office sued the parent company of the payment platform Zelle yesterday, months after the Consumer Financial Protection Bureau (CFPB) dropped a similar case as the new Donald Trump administration dismantled the agency.
- Earlier this year, the CFPB dismissed a similar case after Trump fired the agency’s director and his administration halted nearly all its work, closed its headquarters, and laid off many of its employees.
- The user transferred approximately $1,500 to a Zelle account named “Coned Billing” and later realized they had been scammed, but their bank informed them they would not be able to recover the money, according to the Attorney General’s Office.
Democratic Attorney General Letitia James sued Early Warning Services in a New York state court, alleging that the company, owned by a group of U.S. banks, failed to protect users from fraud by not including critical security features in Zelle’s design.
Earlier this year, the CFPB dismissed a similar case after Trump fired the agency’s director and his administration halted nearly all its work, closed its headquarters, and laid off many of its employees.
In a statement, the New York Attorney General’s Office noted that its lawsuit was filed after the CFPB abandoned its case following a “change in the federal administration.” “No one should be left to fend for themselves after falling victim to a scam,” James said. “I hope justice will be served for New Yorkers who suffered due to Zelle’s security failures.”
James has been one of Republican Trump’s main antagonists and has sued him dozens of times. Last week, the Department of Justice (DOJ) subpoenaed James as part of an investigation into whether she violated Trump’s civil rights by prosecuting him.
James’ lawsuit against Early Warning Services alleged that Zelle, which allows users to send and receive near-instant money transfers, lacked adequate verification processes. Her office claimed that scammers were able to access users’ accounts or trick them into sending money to fake accounts posing as official businesses.
In one case cited by the Attorney General’s Office, a Zelle user received a call from someone impersonating a Con Edison utility company employee and was told their electricity would be shut off unless they sent money via Zelle.
The user transferred approximately $1,500 to a Zelle account named “Coned Billing” and later realized they had been scammed, but their bank informed them they would not be able to recover the money, according to the Attorney General’s Office.
In a statement issued through a spokesperson, Zelle called James’ lawsuit “a political stunt for publicity, not progress.” “The Attorney General should focus on the hard facts, stopping criminal activity, and law enforcement—not overreach and baseless accusations,” the statement added.
In February, Pam Bondi, the new U.S. Attorney General appointed by Trump, used her first official press conference to announce a lawsuit against the state of New York, as well as Governor Kathy Hochul, state Attorney General James, and Marc Schroeder—commissioner of the state’s Department of Motor Vehicles (DMV)—alleging that their policies limit cooperation with federal immigration authorities.
Image: DiarioNY
