On August 13, 2025, New York Attorney General Letitia James (“NY AG”) announced the filing of a lawsuit against Early Warning Services, LLC (“Early Warning”), the parent company of electronic payments platform Zelle. Early Warning is a financial technology company co-owned by seven major U.S. banks. Filed in a New York state court, the NY AG’s complaint alleges that insufficient security measures used by Early Warning enabled scammers to steal a total of $1 billion from Zelle users.

The lawsuit alleges that Early Warning developed a streamlined registration process without adequate verification safeguards, which allowed malicious actors to commit a variety of fraudulent actions on the platform. According to the complaint, bad actors could circumvent Zelle’s security and identity verification measures to take over legitimate user accounts and transfer money into accounts controlled by the fraudsters. The scammers also could use the platform to induce users to transfer funds under false pretenses. According to the complaint, Early Warning was aware of fraudulent activity on the platform but failed to take “meaningful action” to remedy it.

The NY AG is seeking restitution and damages for impacted New York state residents and a court order requiring the company to implement appropriate anti-fraud measures, among other relief.

In response to the NY AG’s lawsuit, Early Warning released a statement claiming that the New York suit is a “copycat” of an action the Consumer Financial Protection Bureau (“CFPB”) brought against the company in 2024.  The CFPB dropped its lawsuit in March 2025.