Democrats in the House and Senate last week introduced legislation to require financial institutions to reimburse customers for electronic fund transfers that took place because the customer was scammed into sending the payment.
The Protecting Consumers from Payment Scams Act would amend the Electronic Fund Transfer Act “to better protect consumers who are defrauded when they make payments,” according to a summary of the legislation by its sponsors. In addition to expanding legally required reimbursements to cover frauds and scams, the bill would mandate that such payments be evenly split between a customer’s financial institution and the institution that received the fraudulent transfer. It would also mandate that resolution duties apply if the consumer’s account is frozen or closed, unless access has been denied due to a court order, law enforcement or the consumer obtained the funds through unlawful or fraudulent means.
The legislation is sponsored in the Senate [S. 4943] by Sens. Richard Blumenthal (D-Conn.) and Elizabeth Warren (D-Mass.) and in the House [H.R. 9303] by House Financial Services Committee Ranking Member Maxine Waters (D-Calif.)
