During a hearing today on financial scams targeting consumers, Senate Banking Committee members offered different approaches for addressing the problem, with Democrats arguing that banks and other financial institutions should take responsibility for scams targeting their customers and Republicans pushing for consumer education.
Committee Chairman Sherrod Brown (D-Ohio) said technology companies need to do more to prevent fraud through their social media platforms, and that payment platforms should reimburse customers who have been scammed.
“Big banks, with all their vast resources and tools at their disposal, also need to do more to identify scams and stop consumers from losing their life savings through wire fraud,” he said. “And with the rise in wire fraud, the Consumer Financial Protection Bureau needs to use its authorities to ensure big banks follow the law and protect consumers from wire fraud.”
Ranking Member Tim Scott (R-S.C.) instead stressed the need for partnerships with law enforcement and more financial education and financial literacy. “It is my hope that this will not simply turn into a blame game of who’s responsible—whether it’s financial industries whether it’s the scammers,” he said. “We need all hands on deck to solve the problem that we face today and to help protect more Americans from the challenges that they have once their savings are gone.”
Among the witnesses at the hearing was Carri Grube Lybarker, administrator of the South Carolina Department of Consumer Affairs, who said her agency partners with the South Carolina Bankers Association and other associations to educate their members about new and emerging scams.
“Oftentimes it is not just consumer related,” Lybarker said. “Businesses fall victim to scams well, which ultimately impact the prices of the products and the services they’re providing to those consumers.”
The American Bankers Association, Bank Policy Institute and Consumer Bankers Association on Tuesday provided a briefing for committee professional staff and committee member offices on financial scams. In addition, ABA has previously expressed its opposition to legislative efforts to reform the Electronic Funds Transfer Act and its implementing regulation, Reg E, to shift liability to banks for authorized transactions that the consumer voluntarily initiates.
