Law Street Media

Electronic Fund Transfer Fraud with Brad Rustin

Financial Analyst Working on a Computer with Multi-Monitor Workstation with Real-Time Stocks, Commodities and Exchange Market Charts. Businessman Works in Investment Bank Downtown Office at Night.

It’s unlikely Sen. Elizabeth Warren has a future in copywriting for the fintech industry. (That was sarcasm.) Warren, who championed the creation of Consumer Financial Protection Bureau (CFPB), calls the Zelle digital payments network a “preferred tool for grifters like romance scammers, cryptocurrency con artists, and those who prowl social media sites advertising concert tickets and purebred puppies — only to disappear with buyers’ cash after they pay.”   

Scams and fraud committed via the Zelle platform and other peer-to-peer services are surging. According to one lawsuit 18 million Americans were defrauded by schemes perpetrated via apps like Zelle in 2020. Some 1,500 member banks and credit unions participate in the Zelle service. People sent $490 billion via the app in 2021. 

But Zelle owner, Early Warning, and its consortium comprising Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo, have refused to refund customers for most of their losses. Sen. Warren issued a report that the claims for fraud received by just four banks will likely exceed $255 million by the end of 2022 – a $165 million increase over 2020. The senator and consumers say Zelle is violating federal consumer protection law.  

The heart of the problem is this: banks and consumers do not agree on the definition of “fraud.”

For clarity on issues surrounding  the Electronic Fund Transfer Act (EFTA) and its implementing regulation—Regulation E—listen to my interview with fintech attorney Brad Rustin of Nelson Mullins

In addition to chairing the firm’s Financial Services Regulatory Practice, Brad counsels  financial institutions in regulatory matters, including strategic agreements, product development, and operational compliance.  Brad is a Certified Anti-Money Laundering Specialist and a Certified Regulatory Compliance Manager.  He received his JD, magna cum laude, from the University of South Carolina School of Law and his BA in Political Science and History, cum laude, from Furman University. Brad is also the FinTech advisor on the  Editorial Advisory Board of the Journal on Emerging Issues in Litigation


This podcast is the audio companion to the Journal on Emerging Issues in Litigation. The Journal is a collaborative project between HB Litigation Conferences and the Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm. The podcast itself is a joint effort between HB and our friends at Law Street Media. If you have comments or wish to participate in one our projects please drop me a note at

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