While banks have technology and infrastructure in place to help defend themselves and their customers, fighting fraud is a multipronged effort that includes consumer education, dedicated law enforcement and regulatory resources, and cooperation from telecommunications and social media companies, the American Bankers Association and three banking associations said in joint comments to the Senate’s Permanent Subcommittee on Investigations.
The subcommittee yesterday held a hearing on Zelle and fraud. In their comments, the associations said that banks cannot win the fight against scammers and fraud on their own. “The activities of these criminals touch more than just the banking industry, and the efforts to counter frauds and scams must similarly be cross-industry,” they said. “Each step in the scam ecosystem—from how a scammer identifies consumer targets to how the money is processed—offers an opportunity to stop the flow of funds to the criminal. Focusing on only one aspect or one step in the process will not stop this surge of scams. Rather, a holistic approach to address all the entities and elements of a scam has the best chance of being successful.”
The associations pointed to ABA’s #BanksNeverAskThat anti-phishing consumer education campaign and banks’ substantial technology investments as examples of how the industry is fighting fraud. Still, they noted that banks can only provide the leads necessary for law enforcement to track down perpetrators. They also said that federal telecommunications regulators must take steps to prevent criminals from “spoofing” legitimate names and phone numbers to impersonate banks; that telecommunications companies must pursue meaningful initiatives to fight fraud; and that social media companies must proactively root out accounts impersonating bank employees or financial advisers who convince people to send them money for supposedly legitimate reasons
