New York Attorney General Letitia James filed a lawsuit against Early Warning Services, the operator of the Zelle payments network, for enabling scammers to steal over $1 billion from users between 2017 and 2023. The lawsuit alleges that EWS failed to implement critical safety features to prevent fraud.

James is seeking restitution and damages from Zelle, in addition to a court order mandating the implementation of anti-fraud measures. Zelle spokesperson dismissed the lawsuit as a political stunt, stating that over 99.95% of transactions are completed without any reports of scam or fraud.

The Consumer Financial Protection Bureau (CFPB) had previously sued EWS and major U.S. banks like JPMorgan Chase, Bank of America, and Wells Fargo over similar fraud allegations. However, the CFPB dropped its lawsuit against these entities amid a growing number of dismissed cases under acting CFPB Director Russell Vought.

Read more at CNBC: New York AG James sues Zelle parent company, alleging it enabled fraud