The Consumer Financial Protection Bureau is investigating major US banks for their handling of customer funds on the peer-to-peer payments platform Zelle Network, the Wall Street Journal reported on Wednesday.

The probe focuses on JPMorgan, Bank of America and Wells Fargo among other large banks, the report said, citing people familiar with the matter.

JPMorgan last week had disclosed in a filing that it was responding to the consumer financial protection bureau's inquiries regarding Zelle and was considering whether to sue the U.S. consumer watchdog over the agency's inquiries.

Wells Fargo also has previously disclosed in public filings that government authorities have been probing the handling of customer disputes via Zelle.

The proliferation of fraud and scams on Zelle, which is owned by seven major banks including JPMorgan and Bank of America, has drawn attention from U.S. lawmakers including Democratic Senator Elizabeth Warren and regulators concerned about consumer protection.

Banks have argued that covering the cost of scams will encourage more fraud and potentially cost billions of pounds.

Spokespeople for JPMorgan, Wells Fargo, Bank of America and the Consumer Financial Protection Bureau are yet to to comment.

In a statement, Early Warning Services, the operator of Zelle, said it has "proactively taken steps to go above the law by leading the industry in scam reimbursement efforts," and noted that 99.95 per cent of transactions are completed without any reports of fraud or scams.

Senator Richard Blumenthal, a Democrat who chairs a US Senate subcommittee focused on investigations, called on the Consumer Financial Protection Bureau on Monday to investigate dispute resolution practices at Early Warning Services, as well as JPMorgan, Wells Fargo and Bank of America.

That request followed a report from his committee which found reimbursements for unauthorised transactions on Zelle fell "significantly" over a five-year period.

"Zelle and the banks that own it have failed to fully safeguard consumers from a growing threat of scams and fraud," Blumenthal said in a statement, adding: "I look forward to the consumer financial protection bureau reviewing our findings and conducting a thorough investigation."

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