NEW YORK (AP) Months after the federal Consumer Financial Protection Bureau dropped a similar action as the Trump administration was dismantling the agency, New York’s attorney general filed a lawsuit against the parent firm of the Zelle payment platform on Wednesday.
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Early Warning Services, which is owned by a group of U.S. banks, was sued in New York state court by Democratic Attorney General Leticia James, who claimed that the corporation had failed to safeguard consumers from fraud by omitting important safety elements from Zelle’s design.
The Bureau of Consumer Financial Protectiondropped a similar case earlier this year after President Donald Trump ousted the agency’s head and his government shut down the bureau’s headquarters, stopped almost all of its operations, and started firing a lot of its employees.
James’ office said in a statement that it filed the complaint after the Consumer Financial Protection Bureau dropped it after the federal government changed.
James added in a statement that no one who has been duped should be left on their own. I’m eager to see justice served for the New Yorkers who were harmed by Zelle’s security lapses.
James has filed numerous lawsuits against Trump, a Republican, and has been one of his main opponents. According to persons familiar with the situation, the Justice Department subpoenaed James last week as part of an investigation into whether she violated Trump’s civil rights, as reported by The Associated Press and other news agencies.
Zelle, which enables customers to send and receive money transfers almost instantly, was accused by James in his complaint against Early Warning Services of lacking sufficient verification procedures. Scammers were able to access people’s accounts or fool users into wiring money to fake accounts that looked like legitimate companies, according to her office.
According to one case referenced by the attorney general’s office, a Zelle user received a call from a person claiming to be a Con Edison official, warning him that his electricity would be turned off until he transferred them money via Zelle. After transferring roughly $1,500 to a Zelle account called Coned Billing, the user discovered he had been duped, but his bank informed him that he would not be able to retrieve his money, according to James’ office.
Zelle described James’ lawsuit as a publicity gimmick rather than a step forward in a statement released through a spokeswoman.
According to the statement, the Attorney General should avoid overreaching and baseless accusations and instead concentrate on the actual facts, halting criminal conduct and upholding the law.
