Zelle parent sued by New York over negligence leading to fraud

CNN reports that Early Warning Services, operator of the widely used digital payments service Zelle, has been charged by New York Attorney General Letitia James over cybersecurity gaps that allegedly facilitated extensive fraudulent activity on the platform that resulted in the theft of over $1 billion.

Aside from having a registration process without verification steps, which allowed threat actors to spoof government entities and businesses, Zelle also did not act to eject fraudsters from the platform following complaints, as well as failed to require reimbursements for some scams, according to the lawsuit, which also noted EWS's implementation of standard network protections just two years ago. "No one should be left to fend for themselves after falling victim to a scam, and I look forward to getting justice for the New Yorkers who suffered because of Zelle's security failures," said James. However, such legal action has been dismissed by a Zelle spokesperson as a "copycat" of an earlier dismissed lawsuit from the Consumer Financial Protection Bureau.