Bank of America class action claims company does not disclose risks of Zelle fraud

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Bank of America class action lawsuit overview:

• Who: Bank of America faces a Zelle fraud class action lawsuit.
• Why: The suit alleges Bank of America does not disclose the risks of Zelle fraud and refuses to reimburse fraud victims.
• Where: The Bank of America class action lawsuit was filed in California federal court.

Bank of America does not notify account holders it does not protect them from fraud through payment platforms like Zelle and Venmo, according to a recent class action lawsuit.

Zelle is a person-to-person money-transfer app owned and operated by seven of the largest banks in the United States, including Bank of America, the lawsuit states. The approximately 1,500 member banks and credit unions encourage account holders to sign up for Zelle, marketing the app as a convenient, secure and free way to transfer money.

“This is false,” the Bank of America class action lawsuit says. “In fact, there are huge, undisclosed security risks of using the service that BofA omitted from its marketing push to get its account holders to sign-up for the service.”

The class action lawsuit points to a recent New York Times investigation that reportedly found banks are well aware of the widespread fraud associated with Zelle and Venmo networks.

Bank of America class action claims company provides ‘virtually no recourse’ for Zelle fraud

Plaintiff Mohammad Al-Ramahi claims Bank of America fails to notify account holders there is “virtually no recourse for consumers to recoup losses due to fraud” when they transfer money with the Zelle app, even if they report those losses in a timely fashion.

Al-Ramahi says he was the victim of an employment scam in which he was given a $4,950 check, which he deposited into his Bank of America account. The bank allegedly cleared the check and allowed him to access the funds.

The purported employer then reportedly initiated fraudulent transactions by asking Al-Ramahi to repay the money through Zelle and Venmo. He complied with the request, believing it to be part of his new job. Several days later, Bank of America reportedly notified the plaintiff the check was bad, deducted $4,950 from his checking account, charged him a $12 fee and refused to reimburse him for his losses.

Al-Ramahi says he would not have signed up for Zelle if he had known Bank of America actively misrepresented the app as safe and secure. 

He filed his class action lawsuit on behalf of himself and a proposed class of Bank of America account holders who incurred losses through Venmo and/or Zelle fraud.

Banks such as Capital One and Wells Fargo also face Zelle class action lawsuits for allegedly failing to protect customers from fraud.

What do you think of the allegations that Bank of America fails to reimburse account holders even though they know these “safe” apps like Zelle and Venmo are used for widespread fraud? Tell us about it in the comments below.

Al-Ramahi is represented by L. Timothy Fisher, Philip L. Fraietta and Julian C. Diamond of Bursor & Fisher PA.

The Bank of America Zelle fraud class action lawsuit is Al-Ramahi v. Bank of America NA, Case No. 5:22-cv-03118, in the U.S. District Court for the Northern District of California.

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