The banking giants behind the app your grandma uses to send you your Christmas cash got hit with a government lawsuit over incidents like the time she transferred $100 to someone posing as her grandson.

Yesterday, the Consumer Financial Protection Bureau (CFPB) sued the operator of Zelle, Early Warning Service, and three of the largest banks in the consortium that owns it— Bank of America, JP Morgan, and Wells Fargo—accusing them of allowing the service that connects over 2,000 banks to become a fraud cesspool.

Festering fraud

The regulator alleges that as the banking giants scrambled to promote Zelle to catch up to peer-to-peer payment apps like Venmo (which it eventually overtook in popularity), they neglected to imbue it with sufficient anti-fraud safeguards:

• The agency says users have lost over $870 million since Zelle’s launch in 2017, with banks often shrugging at customers’ requests for help getting their money back. In some cases, banks told victims to ask the fraudsters for a refund.
• The CFPB is also accusing the banks of not doing enough to crack down on their own account holders using Zelle to defraud others.

Regulators and lawmakers have previously probed the matter, calling for Zelle customers to get the same fraud protections as payment card users. The banks pushed back, saying they are not responsible for incidents involving victims of trickery voluntarily pressing send, though last year, Zelle did start requiring banks to refund customers who sent money to grifters posing as a government official or a customer’s bank.

In response to yesterday’s lawsuit, Early Warning Service noted that Zelle fraud has declined significantly in recent years and that 99.95% of transactions went through without complaints in 2023. They also claimed the CFPB’s move was politically motivated, possibly alluding to the agency’s recently ramped-up enforcement action in the last weeks of President Biden’s administration.

Looking ahead: It’s unclear if the CFPB will pursue this case under President Trump come January.—SK

The House passed a stopgap bill to keep govt open. After a dramatic day of legislative tumult that was not certain to end well, the House of Representatives voted yea on a funding package that included a short-term spending bill, farm aid, and disaster relief. Elon Musk, whose comments on X radically reshaped the trajectory of Congress’s week, tweeted kudos to House Speaker Mike Johnson for the work, saying the legislation “went from a bill that weighed pounds to a bill that weighed ounces.” The final vote was 366–34, with all opposition coming from Republicans (one Democrat voted present). The bill then had less than six hours to pass the Senate and be signed by President Biden to avoid the shutdown.

Volkswagen will keep factories open after deal with union. After 70 hours of negotiations, the automaker and the union representing its workers agreed to a deal that will not see any plants close. In exchange, Volkswagen will be allowed to cut 35,000 personnel by 2030 but will have to do so by not replacing workers who retire or who accept a buyout. The deal is expected to save Volkswagen about $4 billion annually. VW CEO Oliver Blume said the agreement was an ​​“important signal for the future viability of the Volkswagen brand.”

James Bond franchise stalled at Amazon over family disagreements. There has been a dearth of speculation about which actor will be the next Bond as moviegoers wonder: Will there even be one? The Wall Street Journal reported that Barbara Broccoli, daughter of Bond producer Albert R. Broccoli, who still retains creative control over the franchise, distrusts Amazon’s reliance on algorithms and personal data to make movies. Unfortunately for her, Amazon holds the rights to release new Bond movies by virtue of its purchase of the Metro-Goldwyn-Mayer studio in 2021. In the three years since the deal closed, the only Bond show Amazon has made has been the reality show 007: Road to a Million, which Brian Cox agreed to host, he said, only because he thought he was signing on to star in a Bond movie.—HVL

You mess with the barista, you get the horns: After calls for better pay and more staffing, Starbucks employees in Seattle, Chicago, and Los Angeles started striking yesterday in the union’s largest work stoppage since it began contract negotiations more than two years ago.

Hundreds more stores could join the picket line. Starbucks Workers United said it’ll grow the strike every day that passes without a deal before Christmas Eve. The union represents more than 11,000 people pumping vanilla syrup at 528 stores nationwide, according to the National Labor Relations Board, which is ~5% of the coffee chain’s overall US presence.

“We are ready to continue negotiations,” a Starbucks spokesperson said after the strike started, adding, “We need the union to return to the table.”

• The company had proposed a 1.5% pay raise “in future years” and “no immediate wage increase” in its latest contract offer this week, according to the union’s strike announcement.
• The union argued that Starbucks must have more room to negotiate since its new CEO, Brian Niccol, could earn $100 million in total compensation in his first year.

Understaffed, overwhelmed: About 8% of the time, Starbucks customers now wait between 15 and 30 minutes to get their orders, compared with no notable waits in 2019, according to Bloomberg. Soon after Niccol took the reins in September, the coffee chain announced it would try to limit time-consuming customizations to mobile drink orders.—ML

Netflix has two years to get its IT protocol in order. The streamer announced yesterday that it secured the exclusive US rights for the FIFA Women’s World Cup in 2027 and 2031. The news raised a few eyebrows, considering how many people reported buffering and pixelated images during its highly anticipated foray into boxing last month.

The Mike Tyson vs. Jake Paul fight Netflix livestreamed suffered from so many glitches that one viewer filed a class-action lawsuit against the streamer. Ultimately, though, Netflix claimed 108 million people watched the match, making it the most streamed sporting event ever.

This is the first time FIFA sold its Women’s and Men’s World Cup rights unbundled, highlighting how much interest in women’s sports has exploded in the last few years. The 2027 competition will take place in Brazil, while a location hasn’t been announced yet for 2031.

Big picture: Netflix has long resisted suiting up to enter the live sports arena, but amidst an oversaturated streaming market and stagnated user growth, going sport mode is one of the only paths forward. The internet used to clown on Peacock, but its coverage of the Summer Olympics pushed its usage to an all-time high.—MM

Just when we were about to celebrate the government staying open, we learned the balloon store is shutting down. But we weren’t the only ones surprised.

According to CNN, Party City’s corporate workers did not get a clear announcement, and management did not indicate financial trouble at recent town hall meetings. Word got around internally that Party City would break the chain after its product development team was recalled from an annual trip with vendor reps. According to CNN, “The company believed the trip posed a safety risk, because Party City had stopped paying its suppliers.”

After nearly 40 years in business, PC was formidable. Data company ScrapeHero reports that Party City has 747 stores in 46 states and territories and 606 cities. Store managers were notified that all locations would close in February.—HVL