The lawmakers, both of whom are members of the Senate Banking Committee, are asking Early Warning how it has adjusted its procedures in light of “widespread fraud” that affected 18 million Americans in 2020, according to a New York Times report.
“Your company and the big banks who both own and partner with the platform have abdicated responsibility for fraudulent transactions, leaving consumers with no way to get back their funds,” Warren and Menendez wrote to Ko.
The immediacy of transfers through the platform serve as a draw for users, the senators asserted, but also make scams more effective “as consumers have no option to cancel a transaction even moments after authorizing it,” the senators added.
Banks argue, though, that they have no obligation to return money to fleeced customers, so long as the affected users authenticated the transfers themselves, Warren and Menendez wrote.
The senators pointed to a clarification the Consumer Financial Protection Bureau (CFPB) issued, noting that Regulation E of the Electronic Fund Transfer Act shields victims of fraudulent money transfers, even when they have been “induced” into transferring funds themselves.
A March report from the Federal Deposit Insurance Corp. (FDIC), meanwhile, found that both the banks and platforms like Zelle were held responsible for fraudulent electronic transfers through Regulation E.
The senators asked Ko whether Regulation E applies to scams seen on Zelle, and whether Early Warning or an affected customer’s bank would be responsible for refunds.
In a statement to Banking Dive, Early Warning Services said it is reviewing the letter and will provide a response “in due course.”
Early Warning Services is owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank and Wells Fargo.
Click Here For Original Source.
Former U.S. soldier Sanda Frimpong was sentenced to over three years in federal prison for…
Activity on dating apps and websites increases leading up to Valentine's Day, and so does…
Widow's mysterious death highlights growing concern over romance scams - CBS News Watch CBS News…
SHAH ALAM - Meeting and connecting with potential partners through online dating platforms has become…
Just last month, a California man was sentenced to four years in prison for being…
by Naharnet Newsdesk almost 10 years Australian and New Zealand authorities are investigating whether the…