Banks have long been on the front lines of protecting customers from fraud, but they can’t do it alone, and social media companies and telecommunications providers must do more on their end, the American Bankers Association’s Paul Benda told Nebraska lawmakers this week.
Benda – who is EVP for risk, fraud and cybersecurity at ABA – testified in support of two anti-fraud bills currently before the Nebraska Legislature. The first bill, LB 1118, would require social media companies to take steps to detect and remove fraudulent advertising on their platforms. A similar bill – the SCAM Act – has been introduced at the federal level in the House and the Senate.
The second bill, LB 1082, would require telecommunications companies to protect their customers from receiving unwanted calls and text messages from unauthenticated numbers.
Benda testified on both bills at the request of the Nebraska Bankers Association.
“Nebraska banks are both stewards and leaders in our communities,” NBA Board Chair and First State Bank CEO Mark Linville said. “We are committed to limiting the financial and emotional harm being committed against our fellow Nebraskans. Special thanks to the ABA for their focus on this topic and to Paul Benda for supporting Nebraska’s state-level public policy solutions.”
Social media scams
“The banking industry has invested billions to make our financial system one of the most secure in the world, and Americans recognize that effort,” Benda told members of Nebraska’s Banking, Commerce and Insurance Committee during a hearing on LB 1118. “Surveys show that nine in 10 consumers say their bank is taking proactive steps to protect them from scams. But criminals are innovating too.”
Benda pointed to media reports finding that Meta, which owns Facebook and Instagram, gets up to 10% of its revenue from scam ads. It can take anywhere from eight to 32 strikes to get an ad removed, he noted.
“These statistics are unacceptable,” he said. “Social media companies must do better and remove fake accounts and fraudulent ads more quickly.”
Telecom scams
As for LB 1082, Benda told the Nebraska Transportation and Telecommunications Committee that telecommunications must do more to stop criminals from impersonating banks through spoofed calls and fraudulent tests.
“If the phone says it’s your bank, most people will believe it,” Benda said. “The current system that validates and controls bad telecom behavior is broken.”
Banks are proud of the role they play in protecting consumers, he added. “Fraud is not just a banking problem – it is an ecosystem problem. Until all parts of that ecosystem are equally committed to protecting consumers, the American public will remain at risk.”
