Consumer Financial Protection Bureau Ends Year With A Bang. No, Not Like That, You Goofballs.
Thank you Senator Warren, ma'am, may we have another?
The Consumer Financial Protection Bureau is ending 2024 by doing its job, going after financial baddies who rip off consumers. The Friday before Christmas, the CFPB filed a lawsuit against three big banks, accusing them of not doing enough to prevent fraud on the peer-to-peer payment app Zelle. And then on Monday, CFPB sued Walmart over a crappy scheme that it uses to pay some of its delivery drivers.
It’s unclear whether the incoming Trump administration, with its commitment to letting big businesses do whatever they want, will continue the lawsuits under whomever Trump appoints to run the bureau. CFPB Director Rohit Chopra, a Biden appointee, has a five-year term that runs until 2026, but Trump can fire him at will. So far, Trump hasn’t named anyone for the job, so it could be anyone who anchors a show on Fox Business.
Th-th-th That’s Zelle, Folks!
The first of the lawsuits alleges that JPMorgan Chase, Bank of America, and Wells Fargo, three of the seven banks that own Zelle, and “Early Warning Services,” the company that runs the app, haven’t taken adequate steps to protect consumers who might be scammed using Zelle. That’s led to customers being ripped off by more than $870 millions in the seven years Zelle has been in operation, although of course the banks and Zelle say nuh-uh, that’s not the case, honest.
CNN notes that if someone’s account is hacked, Zelle will refund any transactions done by the hackers, but the CFPB alleges that if people are ripped off by other types of fraud, they’re pretty much left without help.
“The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle. […] By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.”
In some cases, the agency said, consumers would file fraud complaints with Zelle, only to be told they would need to “contact the fraudsters directly to recover their money.” You wouldn’t believe how unhelpful the customer service department can be at Big Online Fraud Inc.
Beyond that, the banks and Early Warning Services allegedly failed to adequately investigate consumer complaints or offer refunds that are required by law in cases of “fraud and errors.”
CNN explains that the lawsuit charges that the banks
failed to stop transfers when there were indications of fraud and failed to protect its own account owners from using Zelle to perpetrate fraud.
“Defendants’ failures resulted in millions of complaints about Zelle fraud at (JP Morgan Chase, Bank of America and Wells Fargo) alone, including complaints of over $290 million in fraud losses by 210,000 Bank of America customers, over $360 million in fraud losses by 420,000 Chase customers, and over $220 million in fraud losses by 280,000 Wells Fargo customers,” the complaint alleges.
A spokesperson for Early Warning Services, Jane Khodos, insists the suit has no merit, is nonsense, is based on flawed analysis, and that the “timing of this lawsuit appears to be driven by political factors unrelated to Zelle,” because why not throw that in as well?
“Zelle leads the fight against scams and fraud and has industry-leading reimbursement policies that go above and beyond the law. 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,” Khodos added.
Pretty bold claims for someone whose name calls to mind a notorious “Star Trek” war crimer and drooling tentacled alien in “The Simpsons.”
Zelle also told CNN in an email Nuh-Uh, just because people reported fraud to their banks, the $870 million number was misleading, because some charges weren’t fraudulent after all. The company said that “Every reported fraud claim is investigated and often it is determined that fraud was not committed,” so put that in your business journalism pipe and smoke it.
CFPB responded that Yeah Huh there was a lot of uncompensated-for fraud, because
“the defendants did not in fact investigate consumer complaints when they were victims of fraud. The CFPB further alleges that the banks incorrectly denied tens of thousands of fraud claims using faulty logic.”
Also too, a spox for JPMorgan Chase said that CFPB was overstepping its authority in a “last ditch effort in pursuit of their political agenda,” and trying to put banks on the hook for criminals who ripped people off, “even including romance scammers.” Spox Patricia Wexler somehow refrained from shouting that Making America Great Again means consumers need to stop thinking with their gonads and pray for chastity, so there’s that.
A spox for Bank of America similarly said that “More than 99.95 percent of transactions across the Zelle network go through without incident” and the bank works with customers to resolve issues, blah blah corporatespeak.
Wells Fargo “declined comment” because if you were Wells Fargo, you would too.
Another reason Walmart Sucks
In another suit filed December 23, CFPB sued Walmart and a faceless grey-goo financial company called “Branch Messenger” for doing financial nastiness to drivers for Walmart’s “Spark Driver” program, which handles “last mile” deliveries for the behemoth retail megacorporation. CFPB describes the scam operation, which ran for two years starting in 2021, thusly:
The CFPB’s lawsuit alleges that Walmart and Branch opened Branch accounts for Spark Drivers, and Walmart then deposited drivers’ pay into these accounts, without the drivers’ consent. Walmart told Spark Drivers that they were required to use Branch to get paid and that they would terminate workers who did not want to use these accounts.
Setting up bank accounts without people’s authorization — including giving the banking company the workers’ Social Security numbers and other personal info, also without consent — and then telling them that’s the only way they can get paid, is apparently not actually allowed.
On top of that, the lawsuit alleges that if drivers wanted to get their pay on payday, they had to “follow a complex process to access their funds, and when they finally did, they faced further delays or fees if they needed to transfer the money they earned into an account of their choice.” The junk fees charged just to get their own damn pay came to some $10 million, the suit says.
Walmart, naturally, complained in a statement that this was just SO UNFAIR, and that the lawsuit was “riddled with factual errors” and “exaggerations and blatant misstatements of settled principles of law,” and Branch said that while it had cooperated with CFPB inquiries, the agency was just so mean and unfair and stuff, and instead rushed into a lawsuit driven not by protecting workers, but by seeking “media attention garnered by a lawsuit involving one of the world’s biggest retailers.”
We probably shouldn’t expect the Trump administration’s eventual CFPB head to continue either lawsuit out of some mythical commitment to helping out ordinary Americans being ripped off by The Man, because now that he’s in office, Trump and his co-president Elon Musk are firmly on The Man’s side. For that matter, Musk, who tweeted “Delete CFPB” in November, may now start insisting he is himself The Man, not to mention The Big Boss, The Lizard King, The Kwisatz Haderach, and King Shit of Fuck Mountain.
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OT:
I know the world does not revolve around me.
But, I wanted to say that I woke up this morning and the sun was still shining.
Whenever an argument gets really bad, like mine did last night, that would be an excellent time to take my own advice: press the brakes. Say, "This isn't going to get any better, so I'd better think about something positive, then get some sleep."
I wish a good day to the people with whom I had the fight.
Most folk here are nonbelievers, and I just have to accept that. I can still believe in God, and you still don't have to, and that's it.
May everyone have a pretty good day.
Back when I was a younger man and TVs had CRTs, there was a regular at the bar who would yell "Carpet bomb the fuckers!" at the TV newsreaders every once in awhile.
The phrase just leaps to mind whenever I read about Walmart's practices and principles...