Navy Federal class action over Zelle fraud seeks dismissal; plaintiff files opposition memo

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Update: 

• A Navy Federal Credit Union customer urged a New York federal judge to allow a class action to proceed that alleges the bank fails to properly inform its account holders that they will not be reimbursed for financial losses caused by Zelle fraud.
• On Aug. 26, Plaintiff Jacqueline Wilkins filed a memo against the bank’s dismissal motion filed in June in which it argued that she had failed to lay out a claim that the credit union was obligated to investigate fraudulent transactions on Zelle and reimburse account holders.
• In her memo, Wilkins says she has plausibly alleged her claims, including those that the credit union misled customers by saying Zelle was “safe and secure” to use with its accounts. 
• Instead, Zelle has never been safe or secure since money transfers made through the app are immediate and never retrievable, Wilkins says.

Navy Federal Zelle fraud class action lawsuit overview: 

• Who: Jacqueline Wilkins filed a class action lawsuit against Navy Federal Credit Union. 
• Why: Wilkins claims Navy Federal Credit Union does not properly inform account holders that they will not be reimbursed for financial losses due to Zelle fraud.
• Where: The class action lawsuit was filed in New Jersey federal court.

(May 20, 2022)

Navy Federal Credit Union fails to properly inform its account holders that they will not be reimbursed for any financial losses caused by fraud on Zelle, a new class action lawsuit alleges.

Plaintiff Jacqueline Wilkins claims Navy Federal misrepresents the safety of using Zelle for making money transfers.

“(Navy Federal) misrepresents and omits a key fact about the service that is unknown to accountholders: that there is virtually no recourse for consumers to recoup losses due to fraud,” the Navy Federal class action states.

Wilkins claims Navy Federal “prominently touts” that Zelle is a “secure, free and convenient way to make money transfers.” Despite these representations, Wilkins argues there is no recourse for individuals who fall victim to fraud on Zelle, including ways to recoup financial losses on account of it. 

Navy Federal Class Action Alleges Credit Union Has ‘Secret Policy’ Not To Reimburse

Navy Federal also “misrepresents and omits the truth” about its “secret policy” not to reimburse its account holders for losses caused by fraud on Zelle even in the event that they are reported in a timely fashion, the Navy Federal class action alleges.

“NFCU was required not to misrepresent the unique and dangerous features of the Zelle service in its marketing about it and in contractual representations. But it failed to do so,” the Navy Federal class action states.

Wilkins claims the alleged misrepresentations by Navy Federal led account holders like herself to sign up for the Zelle service “without the benefit of accurate information regarding that service.”

“Such users never would have signed up for Zelle in the first place if they had known the extreme risks of signing up for and using the service,” the Navy Federal class action states.

Wilkins claims Navy Federal is guilty of breach of contract, including breach of the covenant of good faith and fair dealing, and in violation of the New Jersey Consumer Fraud Act. 

She wants to represent a nationwide class and New Jersey subclass of individuals with a Navy Federal account who signed up for service with Zelle and were not reimbursed for losses caused by fraud. She also demands a jury trial and requests declaratory relief along with punitive, exemplary, actual and/or compensatory damages for herself and all class members. 

Sens. Elizabeth Warren, D-Mass., and Robert Menendez, D-N.J., wrote a letter to the owner of Zelle last month to warn it about the “widespread” fraud on the platform. 

Have you not been reimbursed after suffering financial losses due to fraud on Zelle?  Let us know in the comments! 

The plaintiff is represented by Rachel Edelsberg of Dapeer Law, P.A; Scott Edelsberg and Christopher Gold of Edelsberg Law, PA; and Andrew J. Shamis of Shamis & Gentile, P.A.

The Navy Federal Zelle Fraud Class Action Lawsuit is Wilkins v. Navy Federal Credit Union, Case No. 2:22-cv-02916, in the U.S. District Court for the District of New Jersey.

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