New York sues Zelle, says security lapses led to 'rampant' consumer fraud
The lawsuit in a New York state court in Manhattan followed the U.S. Consumer Financial Protection Bureau's decision in March to drop a similar case.
That agency has ended most enforcement activity following U.S. President Donald Trump's return to the White House.
Zelle was launched in 2017, and competes with apps such as PayPal's (PYPL.O), opens new tab Venmo and Block's (XYZ.N), opens new tab Cash App.
Its parent, Early Warning Services, is owned by seven large U.S. banks: Bank of America (BAC.N), opens new tab, Capital One (COF.N), opens new tab, JPMorgan Chase (JPM.N), opens new tab, PNC (PNC.N), opens new tab, Truist (TFC.N), opens new tab, US Bank (USB.N), opens new tab and Wells Fargo (WFC.N), opens new tab.
James said Zelle's parent and the banks knew for years that the platform was vulnerable to fraudsters but ignored basic safeguards, with the banks sometimes ignoring customer complaints while Zelle let fraudsters stay on the platform.
The result was "rampant" fraud, according to the complaint.
Typical scams involved hacking into users' accounts and making unauthorized transfers, convincing users to send money for nonexistent goods and services, and impersonating banks, government offices and utilities.
James said one victim was told his electricity would be shut off unless he paid Con Edison $1,477 via Zelle, to an account named "Coned Billing."
The lawsuit seeks to require Zelle to beef up its anti-fraud protections, and pay restitution and damages to defrauded New Yorkers.
"No one should be left to fend for themselves after falling victim to a scam," James said in a statement.
Early Warning Services did not immediately respond to a request for comment. The banks were not named as defendants.
James sued Capital One in May for allegedly cheating savings depositors out of millions of dollars in interest, and in June settled claims against MoneyGram over remittance transfer lapses. The CFPB abandoned similar cases earlier in the year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
20 minutes ago
- Daily Mail
Walmart to pay millions after overcharging customers
Walmart will shell out $5.6 million to settle a civil lawsuit that claims the company overcharged its customers. The grocery giant — the largest retailer in the country — was accused by several California counties of ripping off its customers in those areas. The consumer protection lawsuit claimed that Walmart sold products that weighed less than was indicated on the packet. The items that were allegedly affected included fresh produce, baked goods and other packaged foods. The complaint also argued that Walmart was guilty of charging customers more than items were advertised for. 'When someone brings an item to the register to be scanned, the price must be right,' Santa Clara County District Attorney Jeff Rosen (pictured) said following the settlement. 'They expect it. California expects it. My Office expects it — and we will apply the law to make sure of it.' Walmart will pay $5.6 million in civil penalties for violating California's False Advertising and Unfair Competition Laws, the County of Santa Clara said. The penalties paid by the company will not go directly to consumers, but will go to the Santa Clara County DA's Consumer Protection fund. In addition Walmart must also cover the cost of the investigations, adding $139,908.92 to its bill. The chain has also agreed to employ workers specifically to ensure weight and price accuracy in its 280 California stores. Walmart previously settled a similar lawsuit in California in 2012, forking out $2.1 million. Last year the mega retailer also shelled out $45 million to settle a class action suit brought by angry shoppers in Florida after they also claimed they were being overcharged. The settlement class included those who bought weighted goods or bagged citrus in person at a Walmart in the US or Puerto Rico between October 18, 2018 and January 19, 2024. Some individual customers could claim up to $500 as part of the settlement. In another similar lawsuit filed last year, plaintiffs argued that even though price discrepancies might be just a matter of a few cents each they 'add up to hundreds of millions of dollars each year.' Lawyers and other consumers said they found price discrepancies in Florida, Illinois, Indiana, Maryland, New Jersey and New York. Customers also found cost discrepancies in North Carolina — even after a regulator there fined Walmart in 2022 for price-scanning errors. Walmart recently introduced 'digital shelf labels' in thousands of stores across the country. It means the company can update — in minutes — the prices on the 120,000 items each store stocks. Weekly updates to paper shelf labels typically took a store worker about two days. Retail experts in the past have pointed out that such digital labels, and the speed that prices can be altered, could usher in an era of dynamic pricing.
Reuters
20 minutes ago
- Reuters
Dow set to open at record high on rate-cut hopes, UnitedHealth gains
Aug 15 (Reuters) - The blue-chip Dow was on track to open at a record high on Friday, underpinned by expectations of an interest rate cut in September and gains in UnitedHealth's shares after Berkshire Hathaway raised its stake in the health insurer. Futures tracking the tech-heavy Nasdaq were slightly off as chip stocks weakened after Applied Materials (AMAT.O), opens new tab warned of weak China demand. UnitedHealth Group (UNH.N), opens new tab jumped 11.5% in premarket trading after Warren Buffett's company (BRKa.N), opens new tab revealed a new investment in the health insurer, while a securities filing showed Michael Burry's Scion Asset Management included bullish positions in the company. Rising costs in the broader healthcare sector and an about 46% slump in heavyweight UnitedHealth's shares this year have left the Dow (.DJI), opens new tab lagging its Wall Street peers on the road to record highs. The price-weighted index last scaled an all-time high on December 4. This week, however, the healthcare sector (.SPXHC), opens new tab is the top performer on the benchmark S&P 500 and is on track for its best weekly performance in three. Other insurers also gained, with Elevance (ELV.N), opens new tab up 4.2%, Centene (CNC.N), opens new tab rising 2.9% and Molina (MOH.N), opens new tab adding 3.7% before the bell on Friday. More broadly, the main U.S. stock indexes are on track for their second week of gains, buoyed by expectations that the Fed could restart its monetary policy easing cycle with a 25-basis-point interest rate cut in September. The central bank last lowered borrowing costs in December and said U.S. tariffs could add to price pressures. However, recent labor market weakness and signs that tariff-induced inflation was yet to reflect in headline consumer prices have made investors confident of a potential dovish move next month. "A 25bps rate cut is still almost fully priced in although it has put a dampener on tentative expectations that the Fed could deliver an even larger 50bps rate cut like last September," analysts at MUFG said in a note. "Market participants are still confident that the Fed will resume rate cuts in response to weakness in the labor market and the lack of pass through so far to consumer prices from higher tariffs as evident in this week's CPI report." At 07:16 a.m. ET, Dow E-minis were up 303 points, or 0.67%, S&P 500 E-minis were up 9.25 points, or 0.14%, and Nasdaq 100 E-minis were down 19.25 points, or 0.08%. Focus will now be on July retail sales data, due later in the day, and the University of Michigan's report on consumer confidence, for clues on the health of the American consumer. Among other stocks, Applied Materials tumbled 14.1% after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Shares of other chip equipment makers such as KLA (KLAC.O), opens new tab and Lam Research (LRCX.O), opens new tab lost 5.8% and 5%, respectively. Intel (INTC.O), opens new tab rose 2.7% on the heels of a 20% gain this week after a report said the Trump administration was in talks with the struggling chipmaker for the U.S. government to potentially take a stake in the company. On the commodities front, crude prices slipped to around $65 a barrel with attention on a meeting in Alaska between U.S. President Donald Trump and his Russian counterpart, Vladimir Putin, that markets hope could pave the way for a resolution to the Ukraine conflict. The meeting will take place at 1900 GMT.
Daily Mail
20 minutes ago
- Daily Mail
The Wyoming ranch bigger than NYC that's up for sale for $22 million
By A stunning Wyoming ranch larger than all of New York City and the state of Delaware can be yours for $22 million. The Midland Ranch, which has remained in the same family since 1909, spans 1.15 million acres - making it more than five times larger than all five boroughs of the Big Apple. But that figure includes a lot of land leased by the Bureau of Land Management and the state of Wyoming, with LandVest Christie's International Real Estate only offering a deed for 5,880 acres, Cowboy State Daily reports. Leases for the other land may also be conveyed with the property, which is listed for $22 million if bought whole. Prospective buyers, though, could also consider purchasing one of five units, which range in price from $1 million to $9.9 million. The first three units are located near the Boulder area of southwest Wyoming and include the main summer pastures, as well as fisheries, expansive water rights, a rock-climbing mecca on Prospect Mountain and a potential home site along the Little Sandy River, according to Mansion Global. The fourth unit is further to the east, between Pinedale and Rock Spring. It comprises the largest portion of the ranch, including the land leased from the Bureau of Land Management for grazing and trailing. The final section includes the winter pastures and is located south of Rock Spring, just north of the border of Colorado and Utah. 'There are about a million places for a homesite on a property of this scale,' Court Merrigan, the broker for the property, told Mansion Global. 'The only question is what you want. Do you want a view of the Wind River Mountains? Do you want a house near the Big Sandy River? Do you want it near the reservoir?' As it stands currently, the ranch offers two seasonal residences in the Prospect Mountains for the summers. There are also functional buildings that serve as bunkhouses for ranch hands, as well as barns, shops and corrals made of weathered wood. A historic sheep-shearing shed also sits on the expansive property, which is currently owned by Pete and Sue Aramel, third-generation sheep and cattle ranchers whose ancestors came from the Basque region of France. 'They brought sheep-raising with them from the old country and they have kept up with it,' Merrigan said of their transhumance method of herding - which involves moving livestock more than 100 miles between summer and winter pasteures. 'Taken as a whole, that makes this a very unique operation,' he noted. 'There's few places left in the West that truly practice it.' In addition to the unique ranching opportunities the land provides, its miles of private river frontage along the Big Sandy River and Little Sandy Creek offers 'world-class' fishing, while the vast land offers plenty of hunting opportunities with herds of more than 15,000 antelope as well as herds of elk and deer. 'Trophy game is out there, just because of the scale this property has,' Merrigan said. 'And because of the way they have managed things with that transhumance, which flows in tandem with the natural ecosystem and the natural migration patterns of the animals that are out there.' Much of the land also serves as a remnant from the Wild West, with water rights for the property dating back to when Wyoming was still considered an American territory - though Merrigan noted that it has improved since then. 'Over generations, [the] family has augmented its water supply, creating an entirely self-sufficient ranch,' which is important as the southern portion gets 'much more arid,' he said. 'They have managed and handled that and engineered it - over the past, more than a century, so that it is just a beautiful system of wells that are easily within reach of all the livestock,' the broker said. 'It's an amazing oasis down along the river.' Large portions of both the Oregon and Mormon trails ran through the property, with Merrigan explaining that the land served an important role in the Oregon trail. 'This was kind of the parting of the ways,' he said. 'This was where you had to decide if you were going to Oregon, to Utah or to California.' It was also once part of the Outlaw Trail that was traversed by bandits like Butch Cassidy in the late 1800s. 'They chose that spot because it was pretty remote for one, and two, there's a live stream there with potable water,' Merrigan said. 'You can just drink straight from it. So it was a good place for them after whatever they were doin, running down a stagecoach or whatever it may have been back then,' he said of the outlaws that once roamed the land. The ranch, itself, first got its start around 1860, when several cabins served as a remount station for the Pony Express, America's early mail system. It was then homesteaded in the 1890s and settled by French Basque immigrant John Aramel in 1909. 'It's uniqueness in the landscape of the West, based on its scale and what the animals have done over the last generation, this is just a property that is truly unique,' Merrigan told Cowboy State. 'I know everyone always says that, but this is truly one-of-a-kind.'
