New York Attorney General Letitia James has initiated legal action against Early Warning Services

On Wednesday, New York Attorney General Letitia James filed a lawsuit against Early Warning Services, the company responsible for the electronic money-transfer platform Zelle. The lawsuit claims that EWS was aware of certain critical vulnerabilities in Zelle that made it susceptible to fraud but did not implement sufficient safety measures, leading to scammers stealing over $1 billion. Additionally, the attorney general argues that Zelle's irreversible transfer system left many consumers unable to recover their money after being scammed. In response, a spokesperson for Zelle described the New York lawsuit as a "political maneuver aimed at attracting media attention." Furthermore, the Consumer Financial Protection Bureau had to drop a similar case against some of Zelle’s financial backers in March, coinciding with a broader reduction in enforcement actions during the Trump administration.