Bank of America No Help for Defrauded Zelle Users Class Action

Early on, the complaint for this class action says, “The Zelle money transfer system is rife with fraud…” It brings suit against Bank of America, NA (BofA), which advertises the service as being “safe,” yet when consumers are defrauded through its use, it alleges, the bank does not provide assistance to recover the lost funds.

The California Class for this action is all persons in California who (1) had a bank account with BofA and were induced via fraud to perform a Zelle transfer, (2) alerted BofA to the fraudulent transfer, and (3) did not have the fraudulent transfer amount credited by BofA.

The Zelle money transfer service was started by a number of large banks, including BofA. The complaint alleges that the bank “has a huge incentive to get as many of its customers as possible to sign up for and use the Zelle service for payments and money transfers: the more of its accountholders it can convince to sign up for and use Zelle, the more the Bank saves by avoiding transaction payments to other payment networks.”

The complaint alleges that BofA claims that the service is safe to use, for example, calling it “simple and secure” and a “fast, safe and easy way to send and receive money[.]”

In fact, the complaint quotes a page of the BofA website that explains and markets Zelle as saying, “You are not liable for fraudulent Online and Mobile Banking transactions when you notify the bank within 60 days of the transaction first appearing on your statement and comply with security responsibilities.”

But BofA does not provide an accurate picture of the risks consumer run when they use the service, the complaint alleges: “Unlike other commonly used consumer payment systems—credit cards, debit cards, even Paypal—Zelle has no consumer fraud protections, money transfers are immediate and irrevocable, and the Bank will provide no help in the case of fraud.”

According to the complaint, BofA avoids helping fraud victims in two ways. “First,” the complaint claims, “the Bank maintains a massive bureaucratic apparatus designed to make it impossible for victims to lodge a successful fraud claim” and denies all such claims without a full investigation. Second, if the fraud victims were tricked into making a transfer to a scammer, the complaint claims, BofA denies all reimbursement claims.

The average Zelle user does not know, the complaint asserts, that “the Zelle network has become a preferred tool for fraudsters like romance scammers, cryptocurrency con artists and those who use social media sites to advertise fake concert tickets and purebred puppies—or simple for those who steal phone and computers and use their access to drain money from accounts via Zelle.”

Article Type: Lawsuit
Topic: Consumer
Tags: Deceptive Advertising, Fraudulent Payments or Money Transfers, Unfair Competition, Your Bank