Warning that banks cannot fight scams alone, bankers today told House lawmakers that federal agencies need to better coordinate their efforts to mitigate the problem and that social media providers and other technology providers also need to do their part.
The House Financial Services Subcommittee on Financial Institutions held a hearing on fighting fraud. Among the witnesses was Patrick McDade, SVP for fraud and technology risk management at EverBank in Florida, who called for greater government coordination to combat scams. He noted that banks currently heavily invest in protecting customers.
“Banks work hard to protect their customers and the Main Street communities they serve from these scams,” McDade said. “Banks monitor unusual activity, educate their customers about fraud and scams, and train their staff to recognize red flags that a customer may be a scam victim.”
Gay Dempsey, CEO of Bank of Lincoln in Tennessee, said coordination between financial institutions, law enforcement and government is necessary to address the problem. She also pointed to the SCAM Act, a proposed bill before Congress that would require social media companies to verify advertisers’ identity, implement systems to detect fraudulent advertisements, and investigate and remove fake ads.
“Fraud losses disproportionately impact community banks relative to our asset size,” Dempsey said. “For a bank like ours, fraud fundamentally affects our ability to serve our local community.”
