Shortly following a new addition to Zelle's "F.R.A.U.D. Squad" campaign last week, a different kind of fraud squad has weighed in on Zelle's own practices.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit alleging Early Warning Services, the company three operates Zelle, and three of its bank owners -- Bank of America, JPMorgan Chase, and Wells Fargo -- failed both to adequately protect consumers from widespread fraud on the peer-to-peer payment platform, and to provide legally required reimbursements to customers.

The CFPB said it's seeking an end to "alleged unlawful practices" and to "secure redress and penalties and obtain other relief" through the lawsuit, filed last Friday. The CFPB claims customers of the three banks named in the complaint lost more than $870 million since Zelle's 2017 launch due to fraud.

The lawsuit follows an extensive investigation launched by the government agency in 2021 which the CFPB says found that Zelle's owners and operators "rushed to launch a payment system without implementing basic protections for their customers" in the wake of the success of payment services like CashApp and Venmo.

"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," CFPB Director Rohit Chopra said in a statement. "The banks knew their customers were having their money stolen, but since they weren't bearing the cost of these losses themselves, they dragged their feet on fixing the problems."

Chopra claims, "Zelle was marketed as 'safe' and 'secure' to customers who naturally trusted their banks, but the banks failed to fix glaring flaws in their systems even as hundreds of thousands of customers filed complaints about fraud."

Last week, Zelle launched a hero video featuring Christina Ricci returning to her role as a member of its "F.R.A.U.D. Squad." A continuation of last year's educational campaign addressing financial fraud, it's part of a wider focus on promoting the purported safety benefits of Zelle.

Following the CFPB's announcement, Zelle issued a statement responding to what it characterized as the agency's "meritless lawsuit" -- which it claimed would hurt consumers and small businesses, noting that 143 million consumers and small businesses use the platform.

"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," Zelle spokesperson Jane Khodos said in a statement, citing the service's "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.

It's unclear what specific "political factors" Zelle is alleging were the motivation for the timing of CFPB's actions. Later in the response, Zelle characterizes the lawsuit as "part of the CFPB's pattern and practice of regulatory overreach."

Since its inception in the wake of the 2007-2008 financial crisis, the agency has been a regular target of conservative business leaders and Republican politicians, who object to the approach -- or even the continued existence -- of the agency.

According to its statement, Zelle claims it has "made every effort to engage and cooperate with the CFPB on this matter," which could suggest knowledge of the investigation may have influenced its strategy of focusing on financial fraud protections in marketing communications.

Marketing Daily reached out to Zelle for further clarification, but has yet to receive a response.