March 31, 2023
Emerging Litigation Podcast
Brad Rustin, partner and chair of the Financial Services Regulatory Practice at Nelson Mullins, joined Tom Hagy, host of the Emerging Litigation Podcast, to discuss electronic fund transfer fraud via apps like Zelle and to provide analysis of the Electronic Fund Transfer Act and Regulation E.
According to reports, fraudulent activity via Zelle and other peer-to-peer payment services is on the rise. Senator Elizabeth Warren and many consumers say Zelle is violating federal consumer protection law by not allowing consumers to recuperate their funds when bad actors trick them into purchases. Unfortunately, payment platforms and the banks that support them, don’t always agree with consumers on the definition of “fraud”.
“Consumer groups and plaintiffs who have brought class actions against Zelle advocate for a broader interpretation of the regulation to include transactional fraud,” said Rustin. “However, the Consumer Financial Protection Bureau (CFPB) has not adopted such a broad reading, instead the agency has limited its guidance to credential fraud or identity fraud.”
Listen to the full podcast here.
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.