Payments network Zelle and three of its owner banks were sued by the Consumer Financial Protection Bureau on Friday.

Roy Rochlin/Getty Images for Zelle

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Roy Rochlin/Getty Images for Zelle

The Consumer Financial Protection Bureau sued Zelle’s operator, as well as Bank of America, JPMorgan Chase and Wells Fargo, “for failing to protect consumers from widespread fraud” at the payment provider, according to a statement Friday.

CFPB, the federal consumer finance regulator, claims that customers of the three largest banks have lost more than $870 million in the seven years that Zelle has existed because the banks failed to protect them.

The CFPB’s allegations include that Zelle and the banks failed to implement adequate fraud prevention safeguards, allowing fraudsters to proliferate, and that the banks failed to properly investigate customer complaints about Zelle.

“The country’s largest banks felt threatened by competing payment apps and rushed to exclude Zelle,” CFPB Director Rohit Chopra said in a statement. “By failing to provide adequate security, Zelle became a goldmine for fraudsters, while victims were often left to fend for themselves.”

The agency said its lawsuit aims to stop “unlawful conduct,” seek redress for affected consumers and seek a civil monetary penalty.

Zelle responded that it was “fully prepared” to defend itself against “this baseless 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,” the company said in a statement.

Zelle is operated by a company called Early Warning Services, which is jointly owned by seven of the largest banks in the US: Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, US Bank and Wells Fargo.

Early Warning Services and three of its owner banks – Bank of America, JPMorgan Chase and Wells Fargo – are named in the CFPB’s complaint.