Zelle is proactively addressing a lawsuit from New York’s attorney general, who alleges that the platform failed to protect users from significant fraud. The P2P payment service states that only 0.02% of its transactions report instances of fraud or scams.
Launched in 2017, Zelle has gained immense popularity, boasting over 150 million enrolled users who executed more than two billion payments valued at nearly $600 billion in the first half of 2025. However, it has come under scrutiny over fraud issues. Late last year, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against the operator, Early Warning, and its parent banks, including JPMorgan Chase, Bank of America, and Wells Fargo, citing that they allowed fraud to propagate on the platform.
In March, the CFPB retracted its lawsuit amid a shift in agency leadership but this was soon followed by a new lawsuit from New York Attorney General Letitia James in August. James contends that Early Warning created Zelle without sufficient safety features, enabling scammers to steal over $1 billion from users between 2017 and 2023.
In defense, Early Warning highlights that 0.02% of Zelle transactions involve fraud reports, comparing this to the 3% of Americans who experience food poisoning and the 0.07% who suffer injuries from toilets. The company asserts that it employs billions of ‘Trust Signals’ to identify criminal patterns and block scammers, with strong anti-fraud measures implemented since its inception.
Ben Chance, general manager of Early Warning’s identity and payments risk division, emphasizes its role in combating financial crime. Meanwhile, Zelle continues to expand, with the total dollar amount sent in the first half of the year rising 23% from $481 billion the previous year. Transactions to small businesses surged by 31%, reaching 180 million, marking it as the service’s fastest-growing use case.
Denise Leonhard, GM of Zelle, stated: “With continued surging growth, it’s clear Zelle is where the US economy flows. Whether it’s rent, childcare, or paying a small business, Zelle is an essential part of everyday life for millions of Americans. Zelle delivers when the moment demands speed and reliability.”