The lawsuit alleges that after receiving repeated reports of fraud, EWS chose not to adopt basic safety measures that it had the technology and know-how to do. As a result, the lawsuit claims, consumers lost over $1 billion while the company profited from the app's rapid growth.

Zelle was sued on Wednesday by New York Attorney General Letitia James, who said the electronic payment platform's refusal to adopt critical safety features enabled fraudsters to steal more than $1 billion from consumers.

New York Attorney General Letitia James says banks have ignored major security problems.