Judge Clears Way for Fraud Lawsuit Against Zelle Parent

The lawsuit, filed last year, asserts that Early Warning Services ignored warnings from partner banks regarding systemic design flaws. Attorney General James alleges these vulnerabilities facilitated more than $1 billion in losses to scammers since the platform launched in 2017. The court found the state’s claims regarding deceptive marketing and the prioritization of market dominance at the expense of safety to be legally sufficient to move toward trial.

Early Warning Services—a consortium owned by JPMorgan Chase, Bank of America, and Wells Fargo—intends to appeal the decision. Spokesperson Eric Blankenbaker labeled the lawsuit a politically motivated effort, arguing that fraud rates on the platform remain exceptionally low and that the state is targeting the company instead of the criminals responsible for the scams.