Wells Fargo and money transfer service Zelle are facing a class-action lawsuit on allegations of violating the Electronic Fund Transfer Act and California’s Unfair Competition Law, according to the legal proceedings filed by Kazerouni Law Group.
The law group filed the suit on behalf of a Seattle resident who claims he was the victim of a scam targeting Wells Fargo Bank customers who use the Zelle app. The victim claims that scammers stole $7,500 from him by mimicking a Wells Fargo customer service agent who then asked him to send them money, according to court documents.
The 21-page lawsuit claims that even though the plaintiff was wrongfully debited $7,500 through a Zelle scam, Wells Fargo has not reversed or refunded the money, despite being obligated to do so. It further states that this type of scam is well known to numerous banks, including Wells Fargo, but no steps have been initiated to protect or educate consumers.
Zelle has become “a favorite among criminals,” according to the complaint.
The scam involves a fraudster impersonating a person’s bank and then tricking them into sending money.
“Nowhere in Zelle’s marketing does Zelle warn potential users of the risks of being scammed by persons impersonating their banks,” per the lawsuit. “Consumers are not aware that transactions with Zelle differ from other similar platforms.”
The suit further claims that Wells Fargo and Zelle “knew or should have known” that this type of scam could happen and of the possible “financial detriment to consumers.”
The lawsuit is seeking to represent anyone in the U.S. with a Wells Fargo bank account that was erroneously debited using the Zelle app and was not permanently credited by Wells Fargo in full within 45 days of a dispute.
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In a separate matter, Wells Fargo Advisors agreed to pay $7 million to settle federal Securities and Exchange Commission (SEC) charges that the firm failed to report at least 34 suspicious transactions between April 2017 and October 2021 that could have triggered anti-money laundering investigations.
The SEC also accused Wells Fargo of failing to appropriately file another nine reports regarding suspicious transfers because of data-entry problems.