New York sues Zelle, says security lapses led to 'rampant' consumer fraud
NEW YORK (Reuters) -Zelle was sued on Wednesday by New York Attorney General Letitia James, who said the electronic payment platform's refusal to adopt critical safety features enabled fraudsters to steal more than $1 billion from consumers.
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 Venmo and Block's Cash App.
Its parent, Early Warning Services, is owned by seven large U.S. banks: Bank of America, Capital One, JPMorgan Chase, PNC, Truist, US Bank and Wells Fargo.
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.
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From Smoking Passes To Hazing — People Over 50 Are Sharing The "Normal" Aspects Of Their High School Years That Were Actually Suuuuper Problematic
As we all realize, the "good old days' were incredibly toxic, and high school was no exception. From corporal punishment to outdated rules, simply attending school was a nightmare for many... That's why when Redditor u/return_of_da_biscuit asked, "What aspects of your high school experience would be shocking today?" thousands of older adults shared the "normal" parts of their high school experience that are incredibly problematic. Here are 18 of their most enlightening responses: If you're over 50 and remember your toxic high school experiences, feel free to tell us about them using this anonymous form! 1."Teachers openly made fun of students and called them fat, stupid, etc. At graduation practice, the vice principal announced that we were the worst class in recent memory, they couldn't wait for us to go, and none of us would ever amount to anything. The teachers who were there whooped and clapped in agreement." —u/Expert_Potential_661 "A teacher once told one of my friends that he wished he could squeeze his neck until his head shriveled to the size of a pea that he could flick off his neck — complete with relevant hand gestures." —u/themarko60 Related: 2."Shotguns were often seen in gun racks in the back window of trucks in the student parking lot — hunting took place before and after school." —u/PirateKilt "When I was in high school (1984), I bought a shotgun from my biology teacher, who brought it to school with him and gave it to me in the faculty parking lot. This transaction was not secretive or hush-hush in any way because nobody thought it was strange or problematic. In retrospect, I can think of a few classmates (one in my friend group) who definitely wouldn't have been trustworthy enough to purchase a firearm from a teacher on school grounds." —u/CKA3KAZOO 3."First-year high school kids smoking in plain sight of the principal — on school property, no less." —u/nevadapirate "1980: We were allowed to smoke with a smoking pass. I went to a vocational school for the last two years of high school, and we would sit in circles and pass joints. The principal and a lot of teachers smoked too, and used the same smoking area. They would turn their backs on us so they couldn't see us and wouldn't have to get us in trouble. It got so bad that the principal made an announcement. He told us that visitors saw us smoking marijuana and complained. If we kept it up, he said he would have to close the smoking area. A week later, he made an announcement that he saw four people smoking pot; if they came to the office, all would be fine, but if they didn't, he would have to close the smoking area. We went to the office, and there were about 50 people there. He just told us to get back to class." —u/Rosie_Hymen 4."I attended high school in Detroit from 1972 to 1976. During that time, all first-year students were required to take two semesters of swim class. The pool was large with a removable divider across the middle separating the boys' and girls' classes. The only time the divider was removed was on Fridays, just prior to a weekend swim meet. Those few Fridays were the only days that we were allowed to wear swimsuits." "During every other class, we were forced to swim naked. The coaches were fully clothed, but every student was stark naked for the entire class. Their excuse was that since no girls were in the room, there was no reason to wear swimsuits and have to launder them afterwards. I was raised in a house with four sisters, no brothers, and practically Victorian morals. We were never even allowed to exit our bedrooms in underwear, let alone naked. So, needless to say, high school was a bit of a shock, but I got used to it quickly. In hindsight, I realize how genuinely creepy it was." —u/donpreston 5."My grandfather told me when he was in school in the '50s that teachers punished him for using his left hand and forced him to use his right hand." "He said, 'My teachers would swat the back of my hand with a ruler to make me use my right hand.'" —u/iammonos 6."I (female) tried to take shop class instead of home economics. The shop teacher told me, 'I'd be happy to have you in my shop class, but you still have to take home ec because it's state law.'" "Sure enough, it really was state law in Florida. And no, I never got to take shop because I HAD to take home ec." —u/GiggleFester Related: 7."Teachers dating students: It wasn't technically public, but it was an open secret." —u/neoprenewedgie "Our principal dated a student, and everyone knew it. I think it started when she was a junior, but some people claim even earlier. At the time, the principal was married with several children, and a couple of his kids were close to the students' age. In our senior year, the principal was still dating this girl when she became pregnant. She graduated, ready to pop, and the principal left his wife of over two decades to marry her. The principal was never disciplined, and he stayed in his position until he decided to retire in 2005. He and the student stayed married and had more children together." —u/cantyoukeepasecret 8."Girls had to wear skirts or dresses to school, and the hems couldn't be higher than knee level." —u/Bay_de_Noc "Teachers stopped us in the hall and made us kneel. If our skirt touched the floor, we were sent home. In my junior year, we were permitted to wear nice pants, no jeans, then in my junior year, jeans were okay, as long as they were unripped. I went from mandatory skirts and dresses in first grade in 1960, and if you wore slacks in because it was 10 degrees, you had to change in the bathroom to a skirt, to wearing jeans in 1972." —u/HeadCatMomCat 9."Bullying wasn't taken seriously." —u/The0Walrus "In fourth grade, a kid bullied me. He would walk down the aisle and slap me on the back of the head, among other things. Eventually, he did it one too many times, so I stabbed him in the arm with my pencil. We had a conference with the teacher and our parents. The gist was, 'You don't bully him,' and 'You don't stab people.' There was no expulsion or psychotherapy, but he never bullied me again — that wouldn't fly today." —u/The_Camera_Eye 10."Getting 'whacks': The principal, who was also the football coach, had a bat shaved down to about a quarter-inch thick with holes drilled all over it. If you were late to class or did anything out of line, you were sent to the principal's office. Once there, you were expected to bend over and grab your ankles while he smacked the hell out of you — it kept order for the most part." "Parents, for the most part, liked him, and most didn't object to him abusing their kids. I thought he was a sadistic a-hole. If you didn't want to play football, you were on his sh*t list, and I couldn't play because I had farm work to do after school. This was at a small public high school in the 1960s, and there were 45 kids in my graduating class. I was glad to get out of there. I went into the military when I was 18 and never looked back." —u/cg40boat Related: 11."We were all wasted at school dances, and nobody cared. I remember watching a guy talk to the principal while actively wetting his pants because he was so drunk. We'd step just outside the cafeteria doors, where the dances were, and smoke joints." "I had a key to the band room, which was connected to the theater, and I took my girlfriend in and we fooled around on the stage. I'm pretty sure all of the chaperones were drunk, too." —u/Plastic-Sentence9429 12."Class of '75 here: We never heard of students getting pregnant, at least not in open conversation. They would just 'disappear' for long periods of time. Only after I started college did I realize what had happened with some of them, or the news would finally leak out." —u/CanAny1DoItRight "Students were kicked out of school if they got pregnant, yet their male partners were permitted to stay. This happened to a girl in my junior high class in the early '70s, and it was quite controversial in our small town. By the time I graduated in '76, pregnant students were no longer required to leave." —u/DeeDee719 13."When I was 13, my school band went on a trip to England. On sightseeing days, we were dropped off in the morning, someplace like the city center of York, without any chaperones and told to be back at the buses by 3 p.m. and 'Have fun.' If we needed a teacher, they'd probably be hanging out near the maybe not. Just don't be late for the bus, or you may be left behind." —u/pixel_dent "Around 1980, my class went to NYC on a field trip. We were told, 'Be back at the bus by 2 p.m.' We were just kids walking around Central Park. We also went on overnight trips with clubs — one or two chaperones for dozens of kids. We went wild." —u/Better_Metal 14."Boys used to make and set off pipe bombs. The school would be evacuated, and the fire department would be called, but everyone just rolled their eyes and said, 'Kids, what can you do? This is how they are.' It wasn't seen as a big deal." "Today, it would be all over the news and declared an act of violence." —u/Salty-Ambition9733 15."I remember kids bringing pocket knives to school and using them during shop class. When I was growing up in the '90s, it was common for many students to carry them. I went to a small, rural school, and nobody thought much of it, but they really cracked down after Columbine. They installed cameras and started searching backpacks, and the school code of conduct was changed to ban anything that could be used as a weapon." "Flash forward to 2021, my nephew was expelled for accidentally bringing one to school. It was forgotten in his pants pocket. He mentioned it to a friend like, 'Oh no, I forgot I had this in my pocket.' As he was trying to decide whether to confess and turn it in or just keep quiet, his 'friend' ratted him out, resulting in an instant expulsion. He had to finish his last two years through an online program." —u/kmill0202 Related: 16."Drivers' Ed in high school, mid 1970s: We were shown very graphic movies from the '50s — Signal 30, Red Asphalt, Mechanized Death — but they didn't stop anyone from driving like a fool at times, after all, we thought we were invincible." —u/reesesbigcup "We homeschooled our son, so the only place that would teach him Driver's Ed was the Seventh-Day Adventist boarding school. Their teacher did a phenomenal job of scaring the sh*t out of the students about drinking, drugs, and not paying attention while driving. He also told traumatic true stories that my son would retell me on the way home. My son, who is now 36, was so traumatized, as was I, that we've rarely gone over the speed limit since! He never lets anyone except me drive him, and only on rare occasions." —u/CompleteSherbert885 17."Flashback: I was the new kid in school, coming in for the second semester from a very warm part of the country to freezing temps. The English teacher was a devout Baptist who enforced her rule that any kid she called on had to stand up and recite any Bible book, chapter, and verse she requested." "She got me on my second day there. I had no idea how to recite the Bible or where to find the verse she wanted, so I eventually told her, 'I don't know how.' She went off, called me a heathen, the devil's spawn, etc. Just ranting, raving, and asking, 'What is WRONG with you?' (I was not a Christian). I was never happier than the day mandatory school prayer was banned in schools." —u/LimpShop4291 18."Hazing the new guys: My dad told me that back in the day, when he tried out for high school football, the older guys on the team would initiate or 'welcome' the new players who wore briefs with 'Gatorade wedgies.'" "Basically, the seniors would force the new players to drink a FULL bottle of Gatorade, then hang them on a hook in the locker room by their underwear. Within 20 minutes, they would be peeing their pants, and the seniors would be high-fiving and laughing at them. The newbies who experienced this would tell their moms to buy them boxers and wear them from then on out. My dad said his butt was sore for a week afterward, and he had to put ointment on it. The senior guys called this process 'turning a boy into a man' because it was a way of welcoming the new guys to the team and making men out of them. I thought this was mean. I don't know if this type of thing was common on sports teams in the old days." —u/Sufficient-Cost1685 Did any of these stories surprise you? Older adults, what aspects of your high school experience are completely unacceptable now? Tell us in the comments or answer anonymously using the form below! Note: Some responses have been edited for length and/or clarity. Also in Internet Finds: Also in Internet Finds: Also in Internet Finds:
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