Unlawful P2P payment service Zelle accused of Supporting Payment Fraud Scams
In a high-profile legal action, the New York Attorney General Letitia James has filed a lawsuit against Early Warning Services, LLC (EWS), the company behind the popular money transfer service Zelle. The lawsuit, filed in August 2025, accuses EWS of designing Zelle without critical security features, leading to over $1 billion in fraud between 2017 and 2023 [2][4][5].
The lawsuit alleges that EWS was aware of the vulnerabilities and fraudulent activity but failed to implement adequate safeguards or anti-fraud measures for years. The suit seeks restitution and damages for affected New Yorkers and court orders to enforce stronger anti-fraud protections on the Zelle platform [2][4][5].
The New York lawsuit comes after the Consumer Financial Protection Bureau (CFPB) dropped a similar case in March 2025 [1][2]. The complaint details that EWS launched Zelle quickly in 2017 to compete with other platforms but neglected essential security design, allowing scams such as account takeovers and multiple registrations per bank account [1][4].
Zelle initially implemented some basic safeguards in 2019 but abandoned them later, only reintroducing certain safety features after federal investigations began in 2023, which reduced fraud but still left many victims unprotected for years [1]. The New York Attorney General is actively encouraging victims of Zelle scams to report their losses to the Office of the Attorney General’s Consumer Frauds Bureau to support the case and restitution efforts [2][5].
As of late August 2025, the lawsuit is at the filing stage with detailed allegations disclosed but much of the complaint still redacted. No final judgment or settlement has been publicly reported yet [1][4]. The proceedings are ongoing, seeking court orders requiring Zelle to maintain effective anti-fraud measures and compensate scammed users [2].
Meanwhile, cyber threats continue to pose a significant challenge. For instance, a malicious actor breached the Canadian House of Commons, and the FBI has warned about a scheme combining exploitation tactics such as targeting vulnerable populations, impersonating government entities, and asking for payment in crypto or gift cards [3][6].
In a separate but intriguing development, the sculpture Kryptos, installed at CIA headquarters in 1990, contains an encrypted message that has not been completely solved for nearly 30 years [7]. The winner of the upcoming auction of Sanborn's original drafts and proof-of-concept prototype of Kryptos is under no obligation to reveal the sculpture's secrets [8].
As consumers navigate these complex digital landscapes, it's crucial to remain vigilant against scams and cyber threats. Reporting incidents to the appropriate authorities can help in the pursuit of justice and the strengthening of consumer protections.
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