June 2023 Zelle Glitch Caused Double Debits from Chase Customers’ Accounts, Class Action Alleges

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A proposed class action lawsuit claims negligence on the part of Chase Bank and Zelle is to blame for a malfunction that caused payments to be debited twice from consumers’ accounts.

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The 16-page lawsuit says that Chase customers began to notice on June 1 of this year that payments they’d made via Zelle had been debited twice from their accounts, while others discovered they were doubly credited for funds transferred to them via Zelle by other accountholders. In addition, transfers from Chase customers to consumers at other banks were deducted twice from the sending Chase accounts, even though recipients received only one payment, the suit relays.

The case names as defendants JPMorgan Chase Bank, N.A., which does business as Chase Bank, parent company JPMorgan Chase & Co. and Early Warning Services, LLC, a fintech company owned in part by Chase which operates the popular peer-to-peer money transfer service ZellePay.com.

The complaint alleges that the bank failed to properly link to and operate with the Zelle platform, particularly because the malfunction apparently impacted only Chase banking customers. The filing also argues that the defendants have neglected to implement procedures that would quickly detect technical issues, and subsequently failed to promptly alert affected consumers of the network glitch.

Though the erroneous “double debits” from Chase accounts were reversed the following day, the malfunction on Zelle’s network left many customers with overdraft fees resulting from unexpectedly missing funds or negative balances, the lawsuit shares. Per the case, consumers who could not access their funds were apparently unable to pay household bills such as rent, electricity or gas and were thus charged late fees.

Bouncing checks and sudden charges, on top of lengthy wait times on the bank’s customer service line, overwhelmed consumers with worry and stress, the suit claims. Even after the mistakes were reversed, Chase customers—many of whom live paycheck-to-paycheck, the suit says—were “left with damages including overdraft fees, late fees, and extreme anxiety and stress as to whether they would be able to meet their financial obligations,” the complaint contends.

The plaintiff, a Chase customer, used Zelle on June 1 to send his $2,000 monthly rent payment to his landlord’s account at another bank, the filing says. Though the landlord only received one payment, the plaintiff was surprised to see that his Chase statement, in fact, indicated that two deductions of $2,000 had been made, the suit explains. As the case tells it, the second $2,000 deduction caused an overdraft of the man’s account.

The lawsuit looks to represent any Chase customers in the United States whose accounts were affected by the Zelle service malfunction that occurred on June 1, 2023.

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