(The Hill) - The government’s consumer watchdog alleged Zelle and three banking giants failed to protect users from fraud on the peer-to-peer payment network. The Consumer Financial Protection Bureau (CFPB) alleged Friday that Bank of America, JPMorgan Chase and Wells Fargo were slow to crack down on scammers, did not properly investigate complaints of fraud and failed to issue reimbursements to victims, costing consumers more than $870 million since Zelle launched in 2017. “The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,” CFPB Director Rohit Chopra said. “By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.” Zelle said in a statement it would defend itself against the “meritless lawsuit.” “The CFPB’s attacks on Zelle are legally and factually flawed, and the timing of this lawsuit appears to be driven by political factors unrelated to Zelle,” Zelle spokesperson Jane Khodos said. “The CFPB’s misguided attacks will embolden criminals, cost consumers more in fees, stifle small businesses and make it harder for thousands of community banks and credit unions to compete.” About 143 million consumers and small businesses are enrolled in Zelle. In 2023, 99.95 percent of payments were sent without reports of scams and fraud, according to the company, a 50 percent decrease in reports despite a 27 percent increase in transaction volume. The payment network also maintains that it reimburses customers for all instances of fraud as required by law, and that it goes “above and beyond” its legal obligation to reimburse customers for certain types of scams where the customer authorized the transaction. Wells Fargo declined to comment. Bank of America and JPMorgan Chase did not immediately respond to requests for comment.