Zelle Must Face New York Fraud Suit After Dismissal Bid Fails

Zelle, launched in 2017, is an instant peer-to-peer payments network operated by Early Warning Services, which is owned by seven large U.S. banks including Bank of America, JPMorgan Chase and Wells Fargo. New York Attorney General Letitia James sued EWS on Aug. 13, 2025, alleging it delayed basic anti-fraud safeguards while marketing Zelle as safe. Her office says consumers lost more than $1 billion to fraud from 2017 through 2023, making the case a major test of platform accountability for bank-linked digital payments.

New York Supreme Court Justice Phaedra Perry-Bond rejected EWS’s dismissal bid in a late July 20, 2026 ruling, finding James had sufficiently alleged the company prioritized access, convenience, consumer adoption and market dominance over safety. The judge also said EWS’s admission that it collected and retained fees from fraudulent transfers raised questions about whether it ratified scammers’ conduct. The ruling allows the case to proceed but does not decide liability. Zelle said fraud and scam reports have always been exceptionally low and plans to appeal.