Payment app providers could take several steps to better protect servicemembers and their families from fraud, including new investments in anti-fraud measures and improving their responsiveness when an incident occurs, the Consumer Financial Protection Bureau said today in its annual report on financial concerns facing military families. The report found that servicemembers submit complaints related to payment apps at a higher percentage than the general population.
“Often during a permanent change of duty station, servicemembers face the need to secure housing, a new automobile, or daycare during a short window, which often requires them to conduct more online transactions,” the report said. “Servicemembers and their families reported that being scammed online using payment apps can result in serious issues—jeopardized housing, lost life savings, cascading financial distress, emotional distress and embarrassment.”
To fight fraud, the CFPB recommended that payment app providers invest in technology to fight fraud and take measures such as booting repeat fraudsters from their systems. The agency also said that providers are bank and nonbank financial institutions subject to Regulation E and must comply with the regulation’s procedures and timeframes for resolving errors. It further suggested that providers tailor reimbursement policies to better recognize the experiences of servicemembers.
