[Senate Hearing 117-586]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-586


  PROTECTING CONSUMERS FROM FINANCIAL FRAUD AND SCAMS IN THE PANDEMIC
                            RECOVERY ECONOMY

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
             FINANCIAL INSTITUTIONS AND CONSUMER PROTECTION

                                 OF THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

EXAMINING THE FINANCIAL SCAMS FOLLOWING THE COVID-19 PANDEMIC AND THEIR 
       IMPACT ON FAMILIES AND CONSUMERS IN THE RECOVERING ECONOMY
                               __________

                             AUGUST 3, 2021
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                
                                
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: https: //www.govinfo.gov /

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
51-115 PDF                 WASHINGTON : 2023



            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                 ______

     Subcommittee on Financial Institutions and Consumer Protection

                    RAPHAEL WARNOCK, Georgia, Chair

         THOM TILLIS, North Carolina, Ranking Republican Member

ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  TIM SCOTT, South Carolina
MARK R. WARNER, Virginia             MIKE ROUNDS, South Dakota
ELIZABETH WARREN, Massachusetts      BILL HAGERTY, Tennessee
CATHERINE CORTEZ MASTO, Nevada       CYNTHIA LUMMIS, Wyoming
CHRIS VAN HOLLEN, Maryland           JERRY MORAN, Kansas
KYRSTEN SINEMA, Arizona              KEVIN CRAMER, North Dakota

                Annie Wang, Subcommittee Staff Director

           Ryan Adams, Republican Subcommittee Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        TUESDAY, AUGUST 3, 2021

                                                                   Page

Opening statement of Chairman Warnock............................     1

Opening statements, comments, or prepared statements of:
    Senator Tillis...............................................     3
    Chairman Brown...............................................     5

                               WITNESSES

Liz Coyle, Executive Director, Georgia Watch.....................     6
    Prepared statement...........................................    21
    Responses to written questions of:
        Senator Cortez Masto.....................................    42
John Breyault, Vice President of Public Policy, 
  Telecommunications, and Fraud, National Consumers League.......     7
    Prepared statement...........................................    21
    Responses to written questions of:
        Senator Cortez Masto.....................................    42
Rachel Greszler, Research Fellow, The Heritage Foundation........     9
    Prepared statement...........................................    29

                                 (iii)

 
  PROTECTING CONSUMERS FROM FINANCIAL FRAUD AND SCAMS IN THE PANDEMIC
                            RECOVERY ECONOMY

                              ----------                              


                        TUESDAY, AUGUST 3, 2021

                               U.S. Senate,
  Committee on Banking, Housing, and Urban Affairs,
       Subcommittee on Financial Institutions and Consumer 
                                                Protection,
                                                    Washington, DC.
    The Subcommittee met at 2:34 p.m., via Webex and in room 
538, Dirksen Senate Office Building, Hon. Raphael G. Warnock, 
Chairman of the Subcommittee, presiding.

         OPENING STATEMENT OF CHAIRMAN RAPHAEL WARNOCK

    Chairman Warnock. This hearing will now come to order. 
Welcome to the first hearing of the Subcommittee on Financial 
Institutions and Consumer Protection in the 117th Congress.
    This hearing is in a hybrid format. Our Members are in 
person, but we will have witnesses testifying both in person 
and by video. We are grateful for their presence.
    For those joining remotely, just a few reminders: Once you 
start speaking, there will be a slight delay before you are 
displayed on the screen. To minimize background noise, please 
click the mute button until it is your turn to speak or ask 
questions. You should have one box on your screens labeled 
``clock'' that will show how much time is remaining.
    As we are all here in person, our speaking order will be as 
is traditional, that is, by seniority of the Members here when 
the gavel came down and then by seniority of Members arriving 
later, alternating between Democrats and Republicans.
    I am deeply honored to chair the Subcommittee and to work 
with Ranking Member Tillis to ensure stability in our banks, 
credit unions, and other financial institutions that serve 
families and communities in Georgia and all across our country 
and to ensure that consumers are protected from unfair, 
abusive, and deceptive acts and practices in our financial 
system, including financial scams and fraud.
    And this brings me to the topic of our very first hearing 
today, which will examine financial scams following the COVID-
19 pandemic and their impact on families and consumers in the 
recovering economy. Needless to say, the economic turbulence of 
the last year has pushed working American families to the 
brink, forcing them to choose sometimes between their health 
and their livelihoods. According to the Federal Reserve, one in 
four Americans reported at the end of last year that they were 
financially worse off than they were the prior year. This is 
the highest level since 2014.
    Compounding these economic setbacks has been the rise of 
scammers shamelessly seeking to take advantage of working 
families trying to navigate the pandemic, including already 
vulnerable populations like senior citizens, communities of 
color, our servicemembers, and veterans. For instance, when I 
held a tele-town hall a few weeks ago with AARP, one woman from 
Georgia told me that she was receiving three to five scam 
callers per day. Scammers target these populations because they 
know that families are desperate, clawing their way back from a 
pandemic.
    And despite the help provided by the American Rescue Plan 
Act, many families still face limited economic opportunities 
during this recovery as they watch their debt pile up. 
Naturally, they are looking for help.
    And here are just a couple of examples of how scammers are 
stepping in to take advantage of these vulnerable moments of 
economic uncertainty: Just a month ago, the CFPB and the 
Georgia Attorney General's Office took action against the 
Burlington Financial Group, a company that falsely promised its 
services would eliminate credit card debt and improve credit 
scores. The company charged monthly fees that amounted to as 
much as 40 percent of the debt owed, collecting thousands in 
fees from desperate Georgians trying to grapple with mounting 
credit card debt.
    And what did consumers get in return for all of those fees? 
They only got generic form letters to send to their creditors, 
thousands of dollars in fees for a useless piece of paper. Many 
customers never got a dollar of their debt reduced, and in some 
cases they ended up in a worse financial position than before.
    In another case from just 2 weeks ago, the CFPB took on a 
Georgia-based corporation, GreenSky, that took advantage of 
families trying to make necessary repairs to their homes. This 
loan app was supposed to help families access loans for home 
repair services. Instead, it allowed businesses to take out 
loans on behalf of customers without their permission or 
knowledge. GreenSky was operating before the pandemic took 
place, but the group of consumers that they exploited, who 
lacked access to traditional credit markets and relied on 
digital tools to conduct financial transactions, was a 
population that grew dramatically during the pandemic.
    Additionally, we know Federal benefits are often prime 
targets for crooks and scammers have set their sights on 
struggling families receiving Federal help from the American 
Rescue Plan. One scam we have seen frequently in the last year 
occurs when scammers actually impersonate Government officials 
and claim that consumers need to hand over personal information 
to access Federal support, like their COVID-19 relief check or 
child tax credit. These scammers sometimes falsely claim that 
consumers need to, quote, refund the Government for their 
benefits.
    And coupled with these increased opportunities for scamming 
are new tools and financial platforms that enable these scams. 
Due to the pandemic, more and more Americans are engaging in 
financial transactions on new peer-to-peer, online payment 
platforms like Cash App, Venmo, whose terms are often unclear 
and lack critical protections for consumers. Unlike traditional 
debit or credit cards, many of these platforms offer only 
limited protections against scams, leaving many users caught 
unaware that they have been defrauded. These platforms make it 
easier for scammers to swindle consumers out of thousands of 
dollars, with little to no mechanism to hold their scammers 
accountable. In some cases, a consumer could simply put in one 
wrong number or hit one wrong button and their money is gone 
forever.
    Collectively, these frauds swindle countless dollars from 
the most vulnerable members of our society: seniors, 
marginalized communities of color and other communities that 
are marginalized, our veterans, members of the military. And 
most heartbreaking of all, many individuals who fall prey to 
these sophisticated criminals face barriers in reporting these 
crimes and holding the perpetrators accountable. Not only are 
consumers often embarrassed to admit that they have been 
victimized, but they may also not know what resources are 
available to remedy their losses, and even then, investigations 
can take years to deliver justice.
    Here is what I believe: I believe that Congress, and this 
Subcommittee in particular, has a role to play in protecting 
these consumers and preventing scammers from taking advantage 
of more Americans. And so I am looking forward to hearing from 
our witnesses today to learn more about today's financial fraud 
and scams, and how financial institutions, Congress, and 
Federal regulators, including the Consumer Financial Protection 
Bureau, can take action to curb financial fraud and scams. That 
is our work, particularly scams involving companies, payment 
platforms, and other financial institutions that are under this 
Subcommittee's jurisdiction. That is what this hearing is 
about.
    This hearing is about helping people. Hardworking American 
families have already suffered enough from the pandemic, and as 
their economic situation recovers, we cannot allow their hard-
earned dollars to be siphoned off by scams and cons. Thank you.
    And I will now turn to Ranking Member Tillis for his 
opening statement.

            OPENING STATEMENT OF SENATOR THOM TILLIS

    Senator Tillis. Thank you, Chairman Warnock, and for 
holding this hearing, and thanks to the witnesses present in 
the chamber and connecting remotely.
    I absolutely believe that fraud is despicable and illegal 
and should be pursued vigorously and relentlessly. I have seen 
countless hearings when I was on the Aging Committee about how 
seniors were being exploited. I am sure many other committees 
will hear the same thing.
    But I do want to be clear. Some of what we are going to 
hear today lies outside of the Committee's jurisdiction and the 
jurisdiction of financial regulators. The understandable desire 
to bring bad actors to justice should not be an excuse to 
further broaden the scope of Federal regulators' purview. Not 
all fraud is financial services fraud. Given the CFPB's history 
on overreach, I believe that is worth pointing out.
    I also believe that any conversation regarding protecting 
consumers from fraud and scams must include unemployment 
insurance fraud, UI fraud. Recent reporting is beginning to 
shed light on the size, the scope, the implications of this 
fraud although the full toll is likely not to be known for some 
time. And, Mr. Chairman, I would like to seek unanimous consent 
to put forth an article from ProPublica that gives you jaw-
dropping numbers on just the extent of the UI fraud.
    Chairman Warnock. Without objection.
    Senator Tillis. Thank you. The Department of Labor's Office 
of Inspector General placed the prepandemic and proper payment 
rate for Federal UI system at 10 percent. It is one of the 
highest rates in the entire Federal benefits system. 
Extrapolating this rate out to all Federal dollars spent on UI, 
which is expected to be about $873 billion by program end, it 
gives a total of $87.3 billion of improper payments during the 
COVID era. $87.3 billion is roughly 4 times the annual NASA 
budget.
    If $87.3 billion was the full extent, this would be a 
problem, a major one, but not necessarily a scandal. But DOL's 
Inspector General acknowledges the $87.3 billion is likely far 
too conservative. Analysis of the total number of UI claims 
compared to the number of unemployed individuals in the U.S. 
during COVID led researchers to place the amount of UI fraud 
far higher, at $357 billion or 40 percent of the entire 
program. Even worse, a unit for research in news corporation 
Thomson Reuters believes 40 to 50 percent of claims they 
analyzed are highly suspect for fraud.
    And I do want to maybe deviate from my comments for a 
moment. We are not talking about individuals, fraudulently. We 
are talking about organized crime and a number of organizations 
who have bilked the Federal Government and are going to create 
disastrous consequences for what would ostensibly be the 
recipients of the UI benefit.
    If one adds the $166 billion that States contributed to UI 
during the pandemic, the estimated total for the entire program 
surpasses $1 trillion. A fraud rate on this total, similar to 
the Thomson Reuters projection, would mean somewhere between 
$400 and $500 billion in fraud or between 50 to 65 percent of 
the entire annual Defense budget. That is a scandal. It is one 
of epic proportions.
    But aside from the egregious waste of taxpayer dollars, why 
should the average American be concerned? Because there is a 
real change their identity was stolen and used to file 
fraudulent claims. Many experts see online hacking and identity 
theft as foundational to any conversation of COVID-era UI 
fraud. Over the past several decades, hackers have 
systematically stolen personally identifiable information, PII, 
from the Government and private data bases alike. The Privacy 
Rights Clearinghouse identified nearly 2,300 verified hacks 
from 2010 to 2019, which disclosed almost 6.9 billion personal 
records.
    And while the availability and the ease or procurement of 
stolen PII has accelerated over the past several years, it 
increased exponentially during the pandemic. During 2020, the 
Federal Government saw a 2,900 percent increase in consumer 
complaints filed that someone's identity had been stolen and 
used to file fraudulent Federal benefits.
    This rise in fraud is driven by bad actors and, as I said 
earlier, criminal organizations and individual actors. Research 
into dark web forums found at least 25 different platforms with 
users compiling and/or selling private information. Several 
have thousands of participants, and they offer stolen 
identities for sale, tips for bypassing the antifraud 
protections of State UI system and how to do it, and often 
including feedback on which States are easiest to scam.
    In 1 month in Vermont, they determined--the State of 
Vermont determined 90 percent of UI claims--I am sorry, these 
were independent investigators--were likely fraudulent, 90 
percent, likely the result of identifying the States that are 
the easiest targets. Likewise, a single State working with 
Thomson Reuters' fraud detection group received fraudulent 
claims from IP addresses that were traced back to nearly 170 
countries around the world.
    Analysis reveals digital footprints that indicate foreign 
workers, mostly commonly in China, Brazil, Mexico, and West 
Africa, have been hired by sprawling and often highly organized 
criminal enterprises to systematically and repeatedly and 
effectively use stolen American identities to claim UI 
benefits.
    America needs to be made aware of the fraud--of this fraud, 
and Congress must work to carefully craft policies in the 
future that do not jeopardize Americans and their personal 
information. It is imperative that we examine this fully to 
ensure that Government programs, without necessary programs, do 
not become a windfall for scammers and fraudsters alike again.
    And when I get in my questions, I want to talk about some 
of the impacts, Mr. Chairman, I think many Americans are going 
to have next year when they are filing taxes or they get 
audited a year or two from now for having not claimed income 
that they had no earthly idea was claimed in their name. Thank 
you.
    Chairman Warnock. Thank you very much, Ranking Member 
Tillis.
    The Chairman of our Committee is here. Chairman Brown will 
offer remarks.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. Thanks and I will be brief. And thank you, 
Mr. Chairman, Senator Tillis. Thanks for doing this hearing. 
You said the first hearing of your Subcommittee, so 
congratulations.
    The COVID-19 pandemic has claimed the lives of more than 
600,000 Americans. We have made great progress getting shots in 
arms, but we are experiencing surges in areas across the Nation 
we know that have low vaccination rates. It is important we 
continue to provide families with the resources they need to 
protect themselves and their loved ones, both medical 
resources, like vaccines that will save their lives, and also 
economic resources as the economy continues to fully recover.
    While we all hope to avoid, and must work to prevent, a 
future pandemic, we also need to protect American families from 
those who would use a public health emergency and use an 
economic crisis as an opportunity to defraud and exploit them. 
We have seen Americans reach out to the Consumer Financial 
Protection Bureau in record numbers with complaints about 
credit reporting companies and banks and debt collectors. We 
have also heard from CFPB and other Federal agencies that 
scammers are targeting student loan borrowers and homeowners 
and working families who are receiving advanced payments of the 
child tax credit.
    I look forward to working with my colleagues from both 
parties to highlight what we can do to protect workers and 
their families. No one should have their financial future 
ruined because of a global pandemic. Thank you, Mr. Chairman.
    Chairman Warnock. Thank you very much, Chairman Brown. Let 
us now turn to our witnesses. Testifying today will be:
    Ms. Liz Coyle, the Executive Director of Georgia Watch. 
Founded in 2002, Georgia Watch is the State's leading 
nonprofit, consumer advocacy organization. Georgia Watch 
advocates for policies that open doors to the financial 
mainstream, increase individual and family economic security, 
improve access to affordable health care, and lower the energy 
burden on struggling families.
    Also testifying is Mr. John Breyault. Is that correct?
    Mr. Breyault. Yes, sir.
    Chairman Warnock. I want to pronounce your name correctly. 
A nationally recognized consumer advocate with more than 18 
years of experience championing the rights of consumers and the 
underserved.
    Finally, our last witness is Ms. Rachel Greszler, a 
research fellow at the Heritage Foundation, and she focuses on 
retirement and labor policies.
    We appreciate your testimony, and we look forward to our 
discussion. Ms. Coyle, who is testifying virtually, I will now 
turn things over to you.

   STATEMENT OF LIZ COYLE, EXECUTIVE DIRECTOR, GEORGIA WATCH

    Ms. Coyle. Good afternoon. Thank you, Chairman Warnock, 
Ranking Member Tillis, for inviting me to speak before this 
Subcommittee today. I am truly honored to have this 
opportunity.
    As Members of this Subcommittee know, our country still is 
facing significant health risks tied to COVID-19 and recovery 
from the pandemic economy remains challenging for many and 
fraught with obstacles and dangers for the most vulnerable 
among us. Today, we are here to talk about protecting consumers 
from scams and fraud in the pandemic recovery economy. I am 
grateful to the Committee for shining a light on this issue.
    I would like to share with you today some of my concerns as 
a consumer advocate from Georgia. Every day, we work to help 
Georgians with the issues that impact their lives and 
livelihoods. The pandemic public health and economic crises 
further heightened what we already knew. Those already 
struggling to access needed health care, keep the lights on, 
pay off debts, and live in stable housing would be much more 
significantly impact by the challenges suddenly confronting all 
of us. Our toll-free consumer hotline started ringing on day 
one of this crisis, and we continue to hear regularly from 
people needing assistance. This especially is the case among 
our seniors on fixed incomes, veterans, lower-income 
households, and communities of color, who have long been 
disparately impacted in times of crisis.
    We knew many consumers in Georgia were facing--were feeling 
desperate and vulnerable. Bad actors definitely knew that, too. 
From the early days, scammers and fraudsters plotted to benefit 
substantially from these conditions, and as we have learned 
from Federal and State regulators, they did.
    While many of today's scams look a lot like yesterday's, a 
new kid on the economic block may be having an outsized 
influence on the current shape of fraud. Emerging financial 
technology tools certainly offer convenience and, for some 
under- and unbanked Americans, access to the mainstream 
economy, which is good. However, these fintech offerings may 
also be used by bad actors to facilitate scam-based theft. For 
example, a mobile lending technology developed by a company 
from Georgia has been used by home repair scammers as the 
perfect vehicle to steal from unsuspecting, vulnerable 
homeowners. And Chairman Warnock touched on this in his opening 
remarks.
    We also have heard from consumers who have been scammed 
when using a common social media platform, Facebook, that has 
been around for a very long time. We know that scammers use 
Facebook to steal money from unsuspecting consumers. Someone 
might see an ad while using this platform and be tricked into 
purchasing a product from a fake company. When the merchandise 
does not come, they are left with nothing more than a web 
address and maybe an email address to a fraudulent, nonexistent 
company.
    In closing these remarks, I want to acknowledge the vitally 
important role played by the Georgia Attorney General and 
Department of Law and the Consumer Financial Protection Bureau 
in alerting us to emerging scams, and there are new ones that 
we are alerted to practically every day. Notably, these 
regulators both launched investigations and initiated 
enforcement actions related to those home improvement scams you 
have already heard about today.
    I recommend that policymakers ensure our State and Federal 
regulators have the authority and the tools they need to 
regulate effectively and enforce rules as necessary to protect 
consumers and keep the emerging fintech marketplace safe for 
all. And I want to thank you again, Chairman Warnock and 
Ranking Member Tillis, for inviting me to speak before this 
Committee today.
    Chairman Warnock. Thank you so very much, Ms. Coyle.
    Next, we will hear from Mr. Breyault.

 STATEMENT OF JOHN BREYAULT, VICE PRESIDENT OF PUBLIC POLICY, 
    TELECOMMUNICATIONS, AND FRAUD, NATIONAL CONSUMERS LEAGUE

    Mr. Breyault. Good afternoon, Chairman Warnock, Ranking 
Member Tillis, and Members of the Subcommittee. My name is John 
Breyault, and I am the Vice President of Public Policy, 
Telecommunications, and Fraud for the National Consumers 
League. Founded in 1899, NCL's nonprofit mission is to advocate 
for social and economic justice for consumers and workers in 
the United States and abroad. I appreciate the opportunity to 
speak to you today about how fraud linked to the COVID-19 
pandemic and recession has affected vulnerable consumers and 
the role that peer-to-peer, or P2P, payment technologies have 
played in exacerbating that harm.
    To put it bluntly, the COVID-19 pandemic has been a perfect 
storm for scams. By almost any measure, rates of fraud related 
to the pandemic have mushroomed. In 2020, the Federal Trade 
Commission received 4.8 million fraud complaints, more than at 
any time in its 106-year history. Consumers reported $3.4 
billion in fraud losses to the FTC, with a median loss of $306. 
These numbers are widely acknowledged to be only the tip of a 
massive iceberg when it comes to fraud perpetrated during the 
pandemic. And just as deaths, illnesses, and job losses related 
to COVID-19 have fallen hardest on historically marginalized 
communities, so too has the impact of fraud linked to the 
pandemic fallen disproportionately on consumers of color.
    The ultimate goal for fraudsters is stealing money. 
Scammers routinely take advantage of new financial technologies 
to facilitate the transfer of funds. While no financial 
institution wants to be used as a vehicle for crime, there is 
often tension between businesses' desire to secure a particular 
payment vector from fraud while still allowing for legitimate 
transactions to be processed quickly. This tension is clear 
when it comes to the rapid growth of P2P payment platforms such 
as PayPal's Friends and Family and Venmo services, Square's 
Cash App, and Zelle, which is owned by a consortium of major 
banks.
    These services have attracted tens of millions of users by 
allowing for free or very low-cost payments to be sent between 
consumers or from consumers to businesses. Even before the 
pandemic, roughly four in five Americans had used mobile 
payment apps by one estimate. By 2023, it is estimated that 
more than $1 trillion will be transacted by P2P apps annually.
    Unfortunately, the same features that are fueling the rapid 
growth of P2P apps, namely, low-cost, instantaneous payments 
made via smartphone have made P2P a payment method of choice 
for scammers. Analysts estimate that fraud rates on these 
platforms are three to four times higher than for traditional 
methods such as debit or credit cards.
    Despite the platforms' efforts to educate users about the 
risks of sending money via their platforms, more than half of 
consumers surveyed by AARP incorrectly assume that their 
payments would be protected if there is an error or fraud 
associated with the transaction. While no financial service is 
immune from fraud, protections for consumers who lose money to 
scammers on P2P apps are sorely lacking. A big reason for this 
is the loophole in the Electronic Fund Transfer Act that 
excludes payments initiated by the consumer from the protection 
for unauthorized charges. This is also known as ``fraud in the 
inducement'' or ``victim-assisted fraud.'' This allows P2P 
services and banks to avoid liability for payments sent from 
consumers to scammers even when such payments are induced by 
fraud.
    The end result of this loophole is that the liability risk 
for fraud is transferred from the platforms and banks to 
consumers themselves. The only recourse for many victims of 
fraud committed via these apps is to throw themselves at the 
mercy of the banks or platforms and beg to be made whole. 
Unfortunately, thanks to the lack of legal protections, it is 
far too easy for the banks and P2P apps to simply tell fraud 
victims that they are out of luck. And, Senator, we hearing 
from these consumers with these stories every day at NCL.
    To ensure that P2P apps are secure for their users and do 
not continue to be powerful tools for fraudsters, action by 
Congress is urgently needed. My written testimony includes a 
number of legislative actions to strengthen protections for 
consumers using P2P apps. In particular, I would like to urge 
the Members of the Subcommittee to work to enact legislation 
that expands the EFTA's definition of unauthorized electronic 
fund transfer to cover fraudulently induced payments, with 
ultimate liability resting with the institution that received 
the fraudulent payment. Doing so would give consumers the 
confidence that they would be made whole if they are induced to 
send money to scammers via P2P services. It would also create a 
strong incentive for all stakeholders in the P2P payment 
ecosystem to make security a priority just as it is in the debt 
and credit card space.
    In conclusion, Chairman Warnock, Ranking Member Tillis, on 
behalf of the National Consumers League, thank you for 
continuing your work to protect consumers and for holding 
today's hearing. I look forward to your questions.
    Chairman Warnock. Well, thank you so very much for your 
work in this sector and for bringing that experience to your 
testimony.
    Ms. Greszler will testify in person.

   RACHEL GRESZLER, RESEARCH FELLOW, THE HERITAGE FOUNDATION

    Ms. Greszler. Good afternoon and thank you for the 
opportunity to testify today. Having closely followed the 
expansion in unemployment insurance benefits since the 
pandemic, I would like to focus my remarks today on some of the 
unintended consequences of those expansions, which serve as a 
caution against future expansions and also a caution against 
the creation of new Government benefit programs.
    It was clear from the outset that certain components of the 
unemployment expansion were problematic, including the $600 and 
now $300 weekly bonus payments, that both prolonged 
unemployment and also contributed to the current labor market 
shortage by making it advantageous for some people to be 
unemployed as opposed to employed.
    But what was not anticipated was the massive increase in 
fraud in these UI programs. Unemployment benefits are supposed 
to be reserved for individuals who lose their job through no 
fault of their own, and employers are supposed to verify that 
individuals have lost their jobs. But the expansions 
effectively required States to base eligibility determinations 
on self-certification information, which made it relatively 
easy for criminals to steal information and Government 
benefits. And it certainly did not help that many Government 
benefit programs operate on decades-old technology that makes 
it hard for them to adapt quickly and also to prevent fraud.
    In a single year, the number of identity theft reports 
filed with the FTC by individuals who had their information 
used to obtain Government benefits or Government documents 
increased 27-fold. It went from 23,000 identity theft reports 
the year prior to the pandemic to 637,000 the year after the 
pandemic, and that is only the people who know that their 
identity was stolen and who actually filed a report because of 
it.
    Instead of just helping individuals who lost their jobs and 
incomes, much of the UI expansions have instead fueled fraud. 
My analysis of the Department of Labor's data shows that the 
total number of UI benefits sent out between April 2020 and May 
2021 was 1.36 billion checks. But had the programs simply 
covered 100 percent of unemployed workers, which was an 
ambitious goal, 807 million checks would have been needed. That 
means that 557 million benefit checks, equal to $357 billion 
worth of taxpayers' money, went to individuals, mostly 
criminals, who were not actually unemployed.
    While States have undertaken efforts to update their 
technology and to prevent fraud, some States' actions have 
instead fueled fraud. For example, California's Employment 
Department sent out 38 million pieces of mail containing 
individual Social Security numbers since the start of the 
pandemic, and this was after a 2019 State auditor report 
advised them to stop that practice.
    And unfortunately, Government programs themselves are not 
immune to compromise. Massive data breaches across State 
revenue departments, within military medical systems, and at 
the Office of Personnel Management have resulted in tens of 
millions of Americans having their personal information 
compromised.
    UI expansions were supposed to last for about 5 months, but 
instead they are track to last for about 18 months. And despite 
these unintended consequences and the surge in fraud, many 
policymakers want to make parts of these UI expansions 
permanent and also to add new Government programs, but these 
things would simultaneously up the ante for criminals and also 
create new avenues for individuals' and children's personal 
information to be exploited.
    Even prior to the pandemic, Government benefit programs had 
incredibly high rates of fraud and improper payments, including 
12 percent in the child tax credit and 24 percent in the earned 
income tax credit. Creating child payments that are worth up to 
$3,600 per year, while eliminating the income requirements and 
converting them into monthly benefits, will almost certainly 
increase errors and fraud. And other benefit programs, like a 
Federal paid family leave program, childcare subsidies, would 
add new privacy concerns. Along with the creation of these 
programs would be new data bases, and there would be 
requirements for employers, and for private childcare and 
medical providers, to collect and to transmit personal 
information such as health records, children's Social Security 
numbers.
    So rather than requiring individuals to pay higher taxes 
and disclose their personal information to multiple Government 
agencies, in order to receive what politicians think they need 
to provide for their families, instead, lawmakers should let 
Americans keep and freely save more of their own money so that 
they can use it on the things that they want and need without 
the restrictions of Government programs and without putting 
their personal information at risk. Allowing individuals to 
save in universal savings accounts is just one measure that 
would help this goal. Thank you.
    Chairman Warnock. Thank you very much. We will turn now to 
questions. We are grateful to all of the witnesses for their 
testimony.
    Last month, thanks to the American Rescue Plan, over 2 
million Georgia children began receiving the $300 per month 
child tax credit. Experts tell us that this will cut child 
poverty up to 50 percent in our country. Eradicating childhood 
poverty is an issue that touches me deeply. It emerges from my 
own experience and my own faith. And championing this tax cut 
has been one of my proudest moments in the Senate. I think 
ordinary folks, working class people, poor people deserve a tax 
cut.
    The child tax credit not only helps give working families 
financial stability and peace of mind; it boosts the economy 
for all of us. But unfortunately, cybercriminals have been 
targeting this benefit as they target all benefits. The IRS 
recently warned parents of fraudulent phone calls, emails, and 
text messages asking for their personal information. Other 
scammers have pretended to be the IRS, and even parents, for 
payment via gift cards, wire transfer, or cryptocurrency to 
receive the benefit.
    Mr. Breyault, what can lawmakers do to protect families 
from these types of phishing scams?
    Mr. Breyault. Senator, thank you for the question. What can 
happen is that the Senate could consider legislation and other 
protections that would better secure the payment technologies 
that scammers are relying on to--when money is sent from them--
from consumers to the scammers. So for example, I mentioned 
changes that could be made to better secure P2P payment apps. I 
will tell you that, for example, Cash App, which is one that I 
mentioned and I believe you mentioned in your opening remarks, 
is now being used to buy cryptocurrency. From a scammer's point 
of view, this is almost the perfect tool for them to use. So 
considering legislation that would better protect those 
vulnerable payment vectors is one way to go about better 
protecting consumers when they are eligible for these types of 
benefits that you described.
    Chairman Warnock. Thank you so much. As families continue 
to receive the child tax credit, I think it is important for us 
to monitor these types of fraud reports and to work to ensure 
that families who deserve the tax cut, for whom it was 
determined, are actually receiving the tax cut.
    I have got a couple more minutes. I am proud to say that 
Georgia has long been a national leader in the fight against 
predatory lending. Georgia imposes a strict 10 percent usury 
limit on small-dollar loans. Almost 1 in 10 Georgians is a 
veteran. Every one of them deserves protection against 
predatory mortgage lending markets.
    Last year, the CFPB issued a civil penalty against a 
company that was found to have consumers' mailers for mortgage 
lenders guaranteed by the Department of Veterans Affairs that 
contained false, misleading, and inaccurate information. This 
is not the first company doing things like this, and sadly, it 
probably will not be the last.
    Ms. Coyle, what can be done to ensure that Georgia's 
veterans and veterans all across our country, servicemembers, 
military families do not fall victim to scams like this one, 
who prey on those in uniform?
    Ms. Coyle. To----
    Chairman Warnock. Ms. Coyle, you are on mute. If you could 
start again.
    Ms. Coyle. Our nice technical helper, Mr. Moffat, has 
gotten me out of trouble once again.
    Thank you, Chairman Warnock, and I only--I have a minute to 
say that, yes, we are the proud home to many veterans, 
servicemembers, and their families. And we know, tragically, 
that some of these predatory, bad actors prey on them. We know 
that car title lenders, for example, cluster around military 
bases. And we are very pleased that the Department of Defense a 
couple of years ago updated the Military Lending Act. The 
Consumer Financial Protection Bureau is a great resource for 
our servicemembers.
    Right now, we are concerned about scammers who are going 
after veterans and their surviving spouses, trying to get not 
only their pension but, in some cases, their Aid and Attendance 
benefits. And they will try to trick them into thinking that 
they can get you your money faster or get you more benefits. 
And so it is just so important that we rely on our regulators 
and organizations like Georgia Watch to provide educational 
resources and, when we hear about scams, to alert the 
authorities as quickly as possible so that they are shut down 
and enforcement happens.
    Chairman Warnock. Thank you so much, Ms. Coyle.
    Ranking Member Tillis.
    Senator Tillis. Thank you, Mr. Chairman, and once again 
thanks to the witnesses for being here.
    Ms. Greszler, the Department of Labor Office of the 
Inspector General wrote, ``The unprecedented infusion of 
Federal funds into the UI program gave individuals and 
organized criminal groups a high-value target to exploit. That, 
combined with easily attainable, stolen, personal, identifiable 
information and continuing UI program weaknesses identified by 
the OIG, over the last several years, allowed criminals to 
defraud the system.'' Do you agree with that topline 
assessment?
    Ms. Greszler. Yes.
    Senator Tillis. Can you explain how the UI system design 
allowed for both individual and organized criminal elements to 
exploit it using PII?
    Ms. Greszler. Yes. And you know, part of it had to do with 
the nature of the program at the time being outdated, and part 
of it had to do with all of these expansions that were thrown 
onto these systems very quickly.
    You know, the reason that Government benefit programs will 
be utilized for criminals to steal money is that, first, an 
individual's information, which is fairly readily available out 
there, has to have a value on it. And so what this UI program 
did is it increased basically the price tag on individuals' 
personal information.
    Prior to the pandemic, maybe you could use somebody's home 
address and date of birth and name to sell to a telemarketer 
for a very small sum of money. If you were lucky, then you got 
credit card information. You could go charge some money on it 
for a short period of time.
    But after the pandemic, you effectively tied $1,000 a week 
UI benefit to every individual's personal information, and so 
you are increasing the price tag and thus attracting more 
criminals. The more Government benefit programs you have, then 
more dollar value you tie to those. And unfortunately, a lot of 
Government benefits programs are targeted toward lower-income 
individuals. A lot of the ones that are being proposed now 
would be means-tested or income-limited, and so the criminals 
go after those populations that have the highest dollar value 
on them.
    But, second, the programs themselves can be a source of 
compromised information. Some of these State unemployment 
insurance systems were running non COBOL, which was designed in 
the 1960s. Universities stopped teaching it in the 1980s. So 
they were incredibly outdated, and they were not able to adapt 
quickly. And they did not have the authority like a private 
company, to say, ``Hey, we need to slow things down. We are not 
going to do this until we know it is safe and we can protect 
our customers' information.'' They were required to start 
delivering the benefits as soon as the legislation was enacted.
    Senator Tillis. Yes, Mr. Chairman, I think this is--one of 
the reasons why I am highlighting it is I think the storm on 
the horizon with all these benefits that were fraudulently 
obtained. I am thinking about households that are going to be 
completing their taxes next year, or the year after next, and 
somehow being surprised by the idea that they have received 
several thousand dollars in taxable benefits, Federal and, 
where applicable, State taxes.
    And then what are they going to have to go through to 
reconcile it? They may have to hire an attorney. They have got 
to file a fraud complaint. They could potentially get some 
concession on not having to pay it, pending the fraud 
complaint. But I think this is going to be a huge issue that we 
may have to play a role.
    I was trying to sort out this morning how, you know, maybe 
we can sync up the Department of Labor system, which 
administered the UI benefit, and banking, which could 
potentially swim into our--or I should say IRS, so that we can 
try and identify before they get the big surprise a year from 
now or 2 years from now, if they were subject to an audit and 
this information somehow intersects.
    Ms. Coyle, I want to ask you a question. We are talking 
about--in your opening Statement, you made a comment about 
stepping up, providing more tools for prosecution. What advice 
would you give us on more work that Congress should do in the 
area of prevention and financial literacy? What more should we 
be doing on that front?
    Ms. Coyle. Thank you. This time I did it. Thank you, 
Ranking Member Tillis, for that question. You know, the 
conversation that has been about theft of benefits is certainly 
one that we are concerned about. I can tell you that in June I 
heard from a Georgia consumer whose identity was stolen and 
found--and used to apply for unemployment benefits. And he had 
an incredibly difficult time navigating the system of having 
this issue resolved. So the more we can help the States 
untangle some of those challenges that are in place, to make 
sure that those Georgians needing help when they have been 
scammed, or when their identity has been stolen, would be one 
of the primary recommendations I would make.
    Senator Tillis. Thank you. Thank you, Mr. Chair.
    Chairman Warnock. Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Mr. Chair and Ranking 
Member. Thank you to the panelists.
    Let me just start by saying I agree with Senator Tillis. I, 
listen, as a former attorney general, dealt with fraud and 
identity theft. And they are interconnected, and it is a 
reality, and we have not done anything to address really the 
rampant identity theft.
    But I agree with him that we have to put additional 
resources into the enforcement mechanism against fraud for the 
IRS as well as Labor, wherever we can, and we have the ability 
to do that. We have done that in the past. And I think it is 
going to be important for us to continue, as we look at 
providing essential resources to individuals, to guard against 
the predatory nature of fraud which is going to happen.
    And so my question to--let me start with Ms. Coyle and to 
all the panelists. Really, what we are talking about, the 
essential piece of all of the fraud, is the identity theft that 
is associated with it.
    And, Ms. Coyle, let me start with you. What can be done to 
address identity theft and/or educate the consumer so that they 
can guard their personal information or protect against 
identity theft? Is it too late, or are there things that the 
individual consumer can do? And let me start with Ms. Coyle, 
and I will go down the panel, if you----
    Ms. Coyle. I sent a message to Mr. Moffat, who is providing 
technical support. I can--I am unmuted, but unfortunately I was 
not able to hear that last question directed to me. May I ask 
that you repeat it? And I hope I will be able to hear it this 
time, and perhaps Mr. Moffat can fix the technology on his end.
    Senator Cortez Masto. Yes, not a problem. Let me then start 
with Mr. Breyault.
    Ms. Coyle. I am sorry I am not able to hear your sound.
    Senator Cortez Masto. No, that is not a problem. I am just 
asking a question. Yes, I am asking the question about----
    Ms. Coyle. I am hoping Mr. Moffat can help.
    Senator Cortez Masto. Can you hear me now?
    [Technical difficulties.]
    Senator Cortez Masto. For the sake of the time, let me just 
then go to Mr. Breyault. The question, same question, with 
respect to identity theft, is it too late, or are there things 
that we should be doing or can be doing that consumers can use 
to guard against, to protect themselves?
    Mr. Breyault. Yes, Senator. Certainly, the information the 
information that identity thieves need to defraud millions of 
consumers is readily available on the dark web thanks to the 
number of data breaches that Senator Tillis alluded to earlier. 
What can be done is to do things like better data security 
standards so that the supply of information from banks and 
other institutions that hold sensitive personal information is 
cutoff, so it is harder for the scammers to get it in the first 
place.
    Other things that can be done is to follow the money. 
Scammers ultimately, end of the day, want to be paid. And so 
making sure that banks or State UI insurance agencies, who 
detect this kind of fraud, can claw that money back before it 
gets lost to the consumers.
    And certainly, working with financial institutions who are 
facilitating the transfer of this money to make sure that they 
are making security a priority in addition to the speed at 
which these transactions can be processed. So right now, the 
Federal Reserve is considering a new money transfer service 
called FedNow that would allow nearly instantaneous money 
transfers in competition with the banks' Zelle program. 
Unfortunately, the regulations that have been put out there for 
FedNow we and many other consumer advocates do not feel 
properly prioritize security. And so we are worried that in the 
name of convenience and speed that the ability of fraudsters to 
continue to commit identity fraud and ultimately get paid will 
only become easier.
    Senator Cortez Masto. Thank you. I appreciate that.
    Ms. Greszler, any thoughts on how we can address the 
identity theft?
    Ms. Greszler. Yes. I would just like to add that after 
somebody actually has the information it is still possible to 
make it more difficult for them to use that information to 
obtain Government benefits. And the GAO has identified three 
sources of improper payments, and while there are some 
administrative and process errors, the bulk of it comes down to 
insufficient documentation to determine whether or not somebody 
is eligible and what the proper amount of the payment should 
be. And so if you have more documentation and more requirements 
to actually verify that this is the person that they say they 
are, that would help. It is going to slow the process down a 
little bit, but I think that it is still something that is 
necessary to ensure the integrity of the programs.
    Senator Cortez Masto. Thank you. And is there--this is my 
last question, but I think this is also the challenge that I 
have found in the past is educating the consumer. To what 
extent should we be putting resources into educating the 
consumer to beware of potential scams and how to protect 
themselves?
    Mr. Breyault. Senator, consumer education is vital to any 
fraud prevention program, but as I have said in many other 
instances, this is a problem that we cannot consumer-educate 
our way out of. The genie is out of the bottle when it comes to 
identity fraud. And putting the responsibility on consumers 
alone to protect their information, when they are fighting back 
against highly sophisticated, criminal rings of identity 
thieves, who are often beyond the reach of U.S. law 
enforcement, is far too much to--a responsibility to put on 
individual consumers. It has to be an effort that includes 
banks, that includes software companies, and the Government to 
try and get a handle on this program.
    Senator Cortez Masto. The enforcement is key.
    Mr. Breyault. Yes, ma'am.
    Senator Cortez Masto. Thank you.
    Chairman Warnock. Ms. Cortez Masto, we had a technology 
glitch. If you need more time?
    Senator Cortez Masto. No.
    Chairman Warnock. OK. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman and Ranking Member. 
I am Chairman of the Veterans Affairs Committee. Senator Tillis 
sits on that Committee. I am interested in how we are 
protecting the men and women who have protected us. And so this 
is question is for you, Mr. Breyault, and that is: How has 
fraud during the pandemic and economic crisis impacted our 
veterans?
    Mr. Breyault. Senator Tester, thank--is my mic on?
    Senator Tester. Yes.
    Mr. Breyault. Senator, thank you for the question. Members 
of the military, their families, and others in the military 
community are uniquely vulnerable to fraud because of the 
nature of their job. They have a guaranteed income stream. They 
are often moving around, on a frequent basis, as they move from 
posting to posting. They are often targeted by fraudsters.
    And so the solutions that try and better protect them have 
to be unique, and those solutions have to come from not only 
within the Department of Defense, to give these military 
servicemembers the resources they need to spot and avoid these 
scams in the first place, but it also have to come from 
enforcement agencies, like the Department of Justice, the 
Federal Trade Commission, and banking regulators to crack down 
on predatory lenders who may target them, on fraudulent direct 
sellers who may target military families, or other fraudsters 
who are specifically trying to take advantage of the unique 
nature of members of the military community.
    Senator Tester. So you are talking about active military. I 
am talking about the folks who went from active military to the 
civilian life, that are now civilians or veterans because they 
have served our military. Are the same challenges--the same 
solutions to their challenges the same as active military?
    Mr. Breyault. Well, I think military veterans are certainly 
deserving of special attention when it comes to fraud 
protection. As with active military, military veterans often 
have a guaranteed income stream.
    Senator Tester. True.
    Mr. Breyault. And that makes them very attractive to 
scammers. So, yes, I do believe they deserve special attention.
    Senator Tester. So the question becomes: As these scammers 
that are out there stealing information and using it in a way 
that deprives people who need the benefits that are out there 
for them, whether it is unemployment insurance or whether that 
is in benefits that they get through a disability, so how do we 
protect them? I mean, how do we actually get to the bottom of 
this? Is this an issue?
    The lady who is here in person talked about old computer 
systems. And, look, computer systems in the 1960s probably 
should have been replaced 30 years ago, but the truth is: What 
do we need to do? Where do we need to put our focus?
    Mr. Breyault. Senator, I wish there was one silver bullet 
that could address this bullet, but there just is not. There 
needs to be a layered approach to better protecting consumers, 
including veterans, from identity fraud. And that is going to 
require work by credit reporting bureaus----
    Senator Tester. OK.
    Mr. Breyault ----by banks, by software companies, by State 
unemployment insurance programs to update their technology. It 
is something that is going to take a long time and is going to 
require investment at all of those levels that I just 
described.
    Senator Tester. OK. Ms. Coyle, can you hear me?
    She cannot. Well, then there is no need asking her any 
questions.
    We are going to go over to the testimony. Let me get your 
name because I do not want to botch it up too bad. It is not so 
bad. Ms. Greszler, OK? In your testimony, you talked about--and 
you talked about this in your opening Statement, too--that 
there is about 557 million checks that were not actually 
employed; 807 million went to people who were actually employed 
and 557 million did not. Those are pretty stark statistics. How 
confident are you that those are correct?
    Ms. Greszler. Well, what I did is to tabulate the entire 
number of checks that went out and then to tabulate the entire 
number of weeks that people were actually unemployed. You know, 
traditionally, about 40 percent of people who are unemployed 
will collect an unemployment insurance benefit.
    And so what I said is, well, what if actually 100 percent? 
If the programs perfectly got everybody that was unemployed and 
they all got a check, what would that total be? And that is 
where you have the 807 million benefit checks would have gone 
out if you were simply covering 100 percent. And so the excess 
above that is 557 million.
    Now because we do not have a match to see those----
    Senator Tester. Yes, I got you.
    Ms. Greszler ----we do not know exactly. But it is kind of 
a conservative estimate, to say, that these people were not 
unemployed and they were receiving benefits.
    Senator Tester. So have you been able to do any research to 
determine how much of that 557 million was collected by 
organized crime or organized criminals, however you want to put 
it, versus people who are just crooked and applied for 
unemployment benefits when they were not unemployed?
    Ms. Greszler. I think given the magnitude of it--and you 
know, the company ID.me that is working with some of the States 
to increase their fraud protection has estimated it is a $400 
billion sum. Given how large that is, I think the overwhelming 
majority of this is criminal activity as opposed to just 
individual-level fraud and abuse.
    Senator Tester. OK. I appreciate that. Thank you very, very 
much.
    Chairman Warnock. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman. This is a very 
important Subcommittee, and I am glad to be part of it under 
your leadership.
    So I would like to talk today with you all about mobile 
apps. You know, these allow people to instantaneously transfer 
money to friends or family or merchants with just a few taps on 
their phone. They have proved to be a valuable resource in our 
socially distanced, pandemic economy, but along with the 
benefits of instant and contactless payments, these apps have 
made it easier for scammers and fraudsters to reach more people 
faster.
    A recent report using data from the CFPB shows that 
consumer complaints about digital payment apps steadily 
increased over the last few years before skyrocketing during 
the pandemic. The number of consumer complaints about these 
apps increased more than 300 percent in just the first 4 months 
of the pandemic, reached a peak in April of this year at nearly 
double the previous high back in 2020.
    So, Mr. Breyault, I see you nodding as we go through this. 
Your organization has done a lot of good work to protect 
consumers from scams and fraud and abuse, including the scams 
that they face on mobile apps. So I just want to ask you, when 
a consumer wants to use their Venmo or Cash App account to pay 
a friend for lunch, but they make a mistake, say by sending the 
money to another person who happens to have the same name as 
their friend, are they usually able to get the money back?
    Mr. Breyault. No, Senator.
    Senator Warren. Yes. In fact, I understand that if you go 
to Venmo's help center to figure out what to do when you have 
been paying the wrong person, the first thing it tells you is 
ask the person you accidentally paid to send the money back. 
And if that person is not very nice, I take it you are just 
kind of out of luck.
    Mr. Breyault. Yes, that is correct, Senator.
    Senator Warren. All right. So let us just push this a 
little further, Mr. Breyault. Let us say a consumer is tricked 
into sending money to someone who pretends to be a coworker 
collecting money for a gift or to a scammer who promises to 
flip that money into a bigger payday but never makes good on 
the deal. In your experience, are consumers likely to get their 
money back then?
    Mr. Breyault. No, Senator, they are not.
    Senator Warren. So money in these accounts are more like 
cash in your wallet than like money in a bank account. Once it 
is gone, I take it is probably gone for good. Not only does 
that leave consumers extremely vulnerable to scam artists and 
to fraudsters, it also leaves them vulnerable to being hounded 
by the apps themselves. Venmo has deployed predatory debt 
collection tactics against consumers whose accounts have been 
drained into the red by scammers, and it has not let up during 
the pandemic.
    So, Mr. Breyault, do you believe that mobile peer-to-peer 
payment apps should face greater scrutiny from regulators to 
ensure that they provide consumers with stronger protections 
against scam and fraud and, frankly, even simple mistakes?
    Mr. Breyault. Yes, Senator, I do. And I have detailed a 
number of the steps that this Committee can take to better 
protect those consumers in my written testimony.
    Senator Warren. Yes. And thank you for that testimony and 
for the suggestions. You know, I agree with you on this, and 
that is why I am very glad to see that the CFPB has begun 
taking steps to strengthen and to clarify consumer protection 
rules for payment apps.
    These apps are helping to fill gaps in a payment system 
that is too slow; it is too expensive, and it is too 
inconvenient. And there is no doubt that these apps have played 
an important role in our pandemic economy. But we cannot leave 
consumers to fend for themselves on a level playing field that 
is making it even easier for scammers and fraudsters to use 
these apps to do harm. That means that if we really do want to 
level the playing field we have got to make the rules stronger 
and we have got to make sure there is adequate enforcement, to 
ensure that mobile payment apps take responsibility for 
protecting their customers.
    I want to say thank you, Mr. Chairman, for holding this 
hearing, giving us a chance to look at this and so many other 
aspects of where fraudsters have figured out pandemic is a good 
time for them to make money and to step up their efforts to 
cheat everyone else. I look forward to our continuing to work 
on this, and I look forward to your next hearing.
    Chairman Warnock. Thank you so much, Senator Warren, for 
your work in this area for such a long time.
    I see that Senator Van Hollen is present and just in time 
to ask your question.
    Senator Van Hollen. Well, thank you, Mr. Chairman, Ranking 
Member Tillis, for conducting this hearing. I thank all of you 
for your testimony. And, Ms. Coyle, thank you for all the work 
that you do in Georgia.
    I have a question related to medical debt because on this 
Committee, you know, we have learned over the years that many 
Americans are burdened by all sorts of debt. We obviously have 
student loan debt, household debt. The debt that is most under 
collection and most responsible for personal bankruptcies 
continues to be medical debt. Despite improvements many of us 
think we have made in the health care system and affordability, 
we have a long, long way to go on that front, but in the 
meantime, we have people who are being just buried with medical 
debt.
    And so my question is--I do not know if Ms. Coyle is 
remote, but is, what are you doing in Georgia, because my 
understanding is that you have some programs underway to try to 
address this. So what are you doing, but what is the longer-
term solution based on your experience?
    Ms. Coyle. Thank you, Senator, so much for that question, 
for your work in this space. Right now in Georgia, some 30 
percent of adults have medical debt and 48 percent lack access 
to a rainy day fund. It is those emergencies, whether it is an 
unexpected, surprise medical bill, which thanks to hard work in 
our legislature over a few years we now have a ban on surprise 
billing in Georgia. But people do not have that even $500 saved 
up if they have another problem, a very high utility bill or a 
car that need repaired.
    And so with medical--with medical debt, we have put 
together a comprehensive guide, and Georgians call us for 
advice all the time. It is our number one call to our consumer 
hotline. We know that medical debt is actually a barrier to 
health care itself. We know that because of the fear of the 
potential cost of a procedure, and the lack of transparency 
about what a procedure might cost, many people forego getting 
needed care until they are even sicker and the care will be 
even more costly.
    In Georgia, we have not yet expanded Medicaid, and we do 
know that the number of uninsured in Georgia as of 2019 is over 
13 percent.
    Medical debt puts an incredible strain on people's 
financial health. Thirty-seven percent of people with medical 
bills' issues used up all their savings to pay for those bills. 
We call on our health systems, our hospitals, and health care 
providers to be much more transparent and up-front about 
offering financial assistance. Many of the Georgians and 
Americans trapped in medical debt are being hounded by 
hospitals or other--or third-party debt collectors, and those 
same individuals would have qualified for financial assistance 
if it had been offered. So we want to see much more robust 
spending in that space and a much better job of working with 
consumers to offer payment plans and to make sure that the cost 
of care is transparent and that we do everything we can to 
ensure, as we do, that people know where they can get free and 
reduced care. Thank you for that question.
    Senator Van Hollen. Well, thank you for what you are doing. 
Senator Chris Murphy and I and others have introduced 
legislation during this pandemic to, at least on an emergency 
basis, you know, prevent some of the debt collectors, some of 
these worst practices from being implemented because people are 
being chased down even as they are experiencing other 
hardships.
    But clearly, we need a long-term solution. Part of it is, 
of course, more affordable health care, but there are other 
things we can be doing here. I do not know about some of my 
colleagues. We have a number of churches and other faith-based 
institutions in our State, who are raising money and paying off 
people's medical debt. That is a great and kind thing for them 
to do, and I applaud them for doing, but we should not have a 
health care system that depends on, you know, people passing a 
hat at services as the primary mechanism to keep people from 
experiencing bankruptcy.
    And as we see from the figures, despite all their efforts, 
there is still lots of people who are going into personal 
bankruptcy and then losing their homes and other things.
    So I hope that we will find a way to address this because, 
as you pointed out, Ms. Coyle, so many times it is like, well, 
you have this hospital bill, and you are--you know, someone hit 
the back of your car. You have got to replace your fender. You 
have got to spend $400 on a car breaking down or whatever it 
may be, and then you do not pay your medical debt. Then you get 
hounded. Then you get a bad credit rating. And then you have 
this cycle. And since medical debt is the number one cause of 
personal bankruptcy, I really hope we will take a look at it.
    Thank you, Mr. Chairman and Ranking Member, and thank all 
the witnesses.
    Chairman Warnock. Thank you very much, Senator Van Hollen. 
And with that, all questioning is concluded.
    Thanks again to our witnesses for taking the time to be 
with us today and to provide your testimony.
    Today's hearing on frauds and scams is an important step 
toward protecting consumers during the pandemic recovery 
economy, and I look forward to working with my colleagues on 
both sides of the aisle on this issue. And as I said at the 
outset, this topic is about helping American families and 
ensuring that they are not swindled out of their hard-earned 
dollars.
    For Senators who wish to submit questions for the record, 
those questions are due 1 week from today, on Tuesday, August 
10th. And for our witnesses, you have 45 days to respond to any 
questions. Thank you again. And with that, this hearing is 
adjourned.
    [Whereupon, at 3:41 p.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
                    PREPARED STATEMENT OF LIZ COYLE
                   Executive Director, Georgia Watch
                             August 3, 2021
    Good afternoon. Thank you Chairman Warnock and Ranking Member 
Tillis for inviting me to speak before this Subcommittee today. I am 
truly honored to have this opportunity.
    As Members of this Subcommittee know, our country still is facing 
significant health risks tied to COVID-19, and recovery from the 
pandemic economy remains challenging for many and fraught with 
obstacles and dangers for the most vulnerable among us. Today, we're 
here to talk about protecting consumers from scams and fraud in the 
pandemic recovery economy. I am grateful to the Subcommittee for 
shining a light on this issue.
    I would like to share with you today some of my concerns as a 
consumer advocate from Georgia. Every day, we work to help Georgians 
with the issues that impact their lives and livelihoods. The pandemic 
public health and economic crises further highlighted what we already 
knew. Those already struggling to access needed health care, keep the 
lights on, pay off debts, and live in stable housing would be much more 
significantly impacted by the challenges suddenly confronting all of 
us. Our toll-free consumer hotline started ringing on day one of this 
crisis and we continue to hear regularly from people needing 
assistance. This especially is the case among our seniors on fixed 
incomes, veterans, lower income households and communities of color, 
who long have been disparately impacted in times of crisis. We knew 
many consumers in Georgia were feeling desperate and vulnerable. Bad 
actors definitely knew that, too. From the early days, scammers and 
fraudsters plotted to benefit substantially from these conditions. And 
as we've learned from Federal and State regulators, they did.
    While many of today's scams look a lot like yesterday's, a newer 
kid on the economic block may be having an outsized influence on the 
current shape of fraud. Emerging financial technology tools certainly 
offer convenience, and for some under- or unbanked Americans, access to 
the mainstream economy. However, these fintech offerings may also be 
used by bad actors to facilitate scam-based theft. For example, a 
mobile lending technology developed by a company from Georgia has been 
used by home repair scammers as the perfect vehicle to steal from 
unsuspecting, vulnerable homeowners.
    We also have heard from consumers who've been scammed when using a 
common social media platform, Facebook. Scammers use Facebook to steal 
money from unsuspecting consumers. Someone might see an ad while using 
the platform and be tricked into purchasing a product from a fake 
company. When the merchandise doesn't come, they're left with nothing 
more than a web address and maybe an email address to a fraudulent, 
nonexistent company.
    In closing these remarks, I want to acknowledge the vitally 
important role played by the Georgia Attorney General and Department of 
Law and the Consumer Financial Protection Bureau in alerting us to 
emerging scams. Notably, these regulators both launched investigations 
and initiated enforcement actions related to the home improvement scams 
I just referenced. I recommend policy makers ensure our State and 
Federal regulators have the authority they need to set and enforce 
rules that protect consumers and keep the emerging fintech marketplace 
safe for all. Thank you again.
                                 ______
                                 
                  PREPARED STATEMENT OF JOHN BREYAULT
    Vice President of Public Policy, Telecommunications, and Fraud, 
                       National Consumers League
                             August 3, 2021
Summary
    The COVID-19 pandemic has been a boom time for scammers and a 
nightmare for their victims. By almost any measure, rates of fraud 
related to the pandemic have mushroomed. In 2020, the Federal Trade 
Commission received more fraud complaints than at any time in its 106-
year history. The House Select Subcommittee on the Coronavirus Crisis 
estimates that potential fraud involving the Small Business 
Administration's Paycheck Protection Program (PPP) and Economic Injury 
Disaster Loan (EIDL) programs could cost taxpayers $84 billion. The 
impact of this fraud has fallen disproportionately on historically 
marginalized communities, already suffering from high rates of COVID-
related illnesses, deaths, and economic hardship.
    We are pleased to contribute to the Subcommittee's examination of 
the role that insecure peer-to-peer (P2P) payment platforms are playing 
in the transfer of funds from fraud victims to scammers during the 
pandemic. Unfortunately, the same features that are fueling these 
services' explosive growth--low cost, nearly instantaneous payments 
made via a mobile app--have made P2P an increasingly popular payment 
method for scammers. Analysts estimate that fraud rates on these 
platforms are three to four times higher than for traditional payment 
methods such as debit and credit cards.
    The lack of consumer protections for victims is a significant 
reason why fraud rates are so high. Scammers are unlikely to abandon 
P2P platforms as long as they can be used to easily obtain fraudulent 
payments. To address this, we recommend that Congress consider 
extending existing limited liability protections for debit and credit 
card transactions to cover fraudulently induced payments, requiring 
more stringent investigations of potentially fraudulent transactions, 
pushing regulators to enforce error resolution responsibilities for 
consumer errors and fraudulently induced payments, and mandating more 
responsive customer service by P2P platforms.
Introduction
    The National Consumers League appreciates the opportunity to 
provide the Subcommittee with our views on protecting consumers from 
financial fraud and scams as America begins to emerge from the COVID-19 
pandemic.
    Founded in 1899, the National Consumers League (NCL) is the 
Nation's pioneering consumer and worker advocacy organization. Our 
nonprofit mission is to advocate on behalf of consumers and workers in 
the United States and abroad. \1\ For more than 20 years, NCL has 
worked, via our Fraud.org campaign, to educate consumers about the 
warning signs of fraud and promote public policies that protect the 
American public from scams of all kinds.
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     \1\ For more information, visit www.nclnet.org.
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The COVID-19 Pandemic Has Been a Perfect Storm for Fraudsters
    The last 16 months have been boom times for scammers and a 
nightmare for their victims. To put this in context, in 2020 the 
Federal Trade Commission (FTC) received 4.72 million complaints from 
consumers, a 45.7 percent increase over 2019 and by far the largest 
year-over-year increase in the FTC's history. \2\ The median loss 
reported by victims of these scams was $374, though many victims lost 
far more. A consumer who contacted NCL's Fraud.org campaign lost 
$15,000 to a scammer. \3\ What is clear is that even these sobering 
numbers are only the tip of a gigantic iceberg when it comes to COVID-
linked fraud.
---------------------------------------------------------------------------
     \2\ Federal Trade Commission. ``Consumer Sentinel Data Book 
2020''. February 2021. P. 6. Online: https://www.ftc.gov/system/files/
documents/reports/consumer-sentinel-network-data-book-2020/csn-annual-
data-book-2020.pdf.
     \3\ Fraud.org. ``Cash App Scams on the Rise'', June 1, 2021. 
Online: https://fraud.org/cash-app-alert/.
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    For example, the Department of Labor recently estimated that one 
type of fraud alone--unemployment insurance fraud--will have cost 
taxpayers more than $87 billion over the course of the pandemic. \4\ 
Other estimates have put the amount of unemployment fraud during the 
pandemic as high as $400 billion. \5\ Fraudsters are having a heyday. 
One Bronx man received $1.5 million in 10 months, a California real 
estate broker stole more than $500,000 over 6 months, and a Nigerian 
Government official was recently accused of fraudulently obtaining over 
$350,000 in less than 6 weeks. \6\ Even high-profile politicians are 
not immune. The personal information of Senator Diane Feinstein \7\ and 
Ohio Governor Mike DeWine \8\ was reportedly used by unemployment 
insurance fraudsters to try and improperly obtain benefits.
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     \4\ United States Department of Labor Office of Inspector General. 
``DOL-OIG Oversight of the Unemployment Insurance Program'', June 10, 
2021. Online: https://www.oig.dol.gov/doloiguioversightwork.htm.
     \5\ Salmon, Felix. ``Half of the Pandemic's Unemployment Money May 
Have Been Stolen'', Axios. June 10, 2021. Online: https://
www.axios.com/pandemic-unemployment-fraud-benefits-stolen-a937ad9d-
0973-4aad-814f-4ca47b72f67f.html.
     \6\ Podkul, Cezary. ``How Unemployment Insurance Fraud Exploded 
During the Pandemic'', ProPublica. July 26, 2021. Online: https://
www.propublica.org/article/how-unemployment-insurance-fraud-exploded-
during-the-pandemic.
     \7\ White, Jeremy. ``Californian Allegedly Obtained UI Benefits 
Using Feinstein's Identity'', Politico. December 17, 2020. Online: 
https://www.politico.com/states/california/story/2020/12/17/
californian-allegedly-obtained-ui-benefits-using-feinsteins-identity-
1348423.
     \8\ Bischoff, Laura. ``Unemployment Fraud So `Widespread' It Even 
Happened to DeWine and Husted'', Dayton Daily News. January 19, 2021. 
Online: https://daytondailynews.com/local/unemployment-fraud-so-
widespread-it-even-happened-to-dewine-and-husted/
XRDFXUC7EFHKVD2C54SEJGFCCQ/.
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    The statistics are equally sobering for fraud involving other 
pandemic relief programs. A recent analysis by the House of 
Representatives' Select Subcommittee on the Coronavirus Crisis 
identified nearly $84 billion in potential fraud involving the Small 
Business Administration's Paycheck Protection Program (PPP) and 
Economic Injury Disaster Loan (EIDL) programs. \9\
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     \9\ House Select Subcommittee on the Coronavirus Crisis. 
``Lowering the Guardrails: How the Trump Administration Failed To 
Prevent Billions in Pandemic Small Business Fraud'', March 25, 2021. 
Online: https://coronavirus.house.gov/sites/
democrats.coronavirus.house.gov/files/2020-03-25-Staff-Memo-Small-
Business-Fraud.pdf.
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    The variety of scams linked to COVID-19 is staggering. Fraudsters 
have run advance fee scams targeting consumers' stimulus checks. \10\ 
They have committed identity fraud linked to the sharing of COVID-19 
vaccination cards online. \11\ Imposter scams have preyed on consumers' 
fears about Federal Deposit Insurance Corporation-backed bank accounts. 
\12\ Scammers even taken advantage of grieving families by targeting 
the Federal Emergency Management Agency's COVID-19 Funeral Assistance 
Program. \13\
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     \10\ Leonhardt, Megan. ``5 Common Stimulus Check Scams Experts Are 
Warning Consumers To Watch For'', CNBC.com. December 29, 2020. Online: 
https://www.cnbc.com/2020/12/29/stimulus-check-scams-here-are-red-
flags-to-watch-for.html.
     \11\ Gressin, Seena. ``Social Media Is No Place for COVID-19 
Vaccination Cards'', Federal Trade Commission. February 5, 2021. 
Online: https://www.consumer.ftc.gov/blog/2021/02/social-media-no-
place-covid-19-vaccination-cards.
     \12\ Federal Deposit Insurance Corporation. ``FDIC: Insured Bank 
Deposits Are Safe: Beware of Potential Scams Using the Agency's Name''. 
Press Release. March 18, 2020. Online: https://www.fdic.gov/news/press-
releases/2020/pr20032.html.
     \13\ Gressin, Seena. ``Scammers Target Loved Ones of COVID-19 
Victims''. MilitaryConsumer.gov. April 20, 2021. Online: https://
www.militaryconsumer.gov/blog/scammers-target-loved-ones-covid-19-
victims.
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    The Department of Justice and other enforcement agencies have done 
yeoman's work to try and crack down on this wave of criminality, 
particularly scams targeting taxpayer-funded COVID-19 relief programs. 
\14\ Unfortunately, given the scale of fraud linked to the pandemic, 
these efforts are likely to be little more than temporary setbacks for 
the armies of sophisticated and well-organized criminal rings.
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     \14\ United States Department of Justice. ``Justice Department 
Takes Action Against COVID-19 Fraud''. Press release. March 26, 2021. 
Online: https://www.justice.gov/opa/pr/justice-department-takes-action-
against-covid-19-fraud.
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    Many factors have contributed to the historic increase in fraud 
during the pandemic. Rampant misinformation and disinformation about 
the virus have been fertile ground for scammers peddling all manner of 
COVID-prevention pills, testing kits, and treatments. Unprecedented 
economic distress has created ample opportunities for scammers to run 
imposter schemes threatening dire consequences if payments aren't made. 
Scammers can easily contact victims over the phone, text message, 
email, or over the Web, putting millions of potential victims at their 
fingertips. These transactions happen with speed and anonymity through 
gift cards, peer-to-peer (P2P) payment apps, cryptocurrencies, and 
other money transfer services. Cashing out is easy and relatively risk-
free for the criminals.
    Taken together, these factors have created a perfect storm of fraud 
during the pandemic.
The Impact of Fraud Linked to COVID-19 Has Fallen Disproportionately on 
        Marginalized Communities
    Consumers' vulnerability to fraud increases during times of 
economic uncertainty. The COVID-19 pandemic has been no exception. High 
unemployment, the threat of eviction, and social isolation brought on 
by social distancing measures have all contributed to high rates of 
fraud.
    While fraud affects consumers of all races, ages, and income 
levels, consumers from historically marginalized communities have been 
at particular risk of scams. According to a 2017 FTC survey, 19.2 
percent of African Americans and 17.3 percent of Hispanic consumers 
reported being a victim of fraud compared to 15.9 percent of consumers 
overall and 14.9 percent of non-Hispanic Whites. \15\ The same survey 
found that 20.4 percent of consumers who have experienced a serious 
negative life event (e.g., death of a family member or close friend, a 
serious injury or illness in the family, or the loss of a job) reported 
being victims of fraud, compared to 13.1 percent of consumers who had 
not experienced such an event. \16\
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     \15\ Anderson, Keith. ``Mass-Market Consumer Fraud in the United 
States: A 2017 Update''. (Staff Report of the Bureau of Economics, 
Federal Trade Commission.) Table 11. October 2019. Online: https://
www.ftc.gov/system/files/documents/reports/mass-market-consumer-fraud-
united-states-2017-update/p105502massmarketconsumerfraud2017report.pdf.
     \16\ Ibid. P. 106.
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    Specific data on the intersection of COVID-19 fraud and minorities 
is lacking. However, given what we know about the vulnerability of 
consumers of color to fraud and the high toll that COVID-19 has taken 
on their communities in terms of deaths, illnesses, and economic harm, 
\17\ we can conclude that fraud linked to the pandemic is taking a 
similarly disproportionate toll on historically marginalized consumers.
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     \17\ Zamarripa, Ryan, and Roque, Lorena. ``Latinos Face 
Disproportionate Health and Economic Impacts From COVID-19''. Center 
for American Progress. March 5, 2021. Online: https://
www.americanprogress.org/issues/economy/reports/2021/03/05/496733/
latinos-face-disproportionate-health-economic-impacts-covid-19/.
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    Anecdotal evidence supports this conclusion. This spring, the FTC 
and the State of Arkansas sued the operators of a ``blessing loom'' 
pyramid scheme that allegedly targeted African Americans struggling 
financially during the pandemic. According to the FTC, the scammers 
behind the scheme defrauded thousands of consumers of tens of millions 
of dollars by promising investment returns as high as 800 percent. \18\ 
The National Caucus and Center on Black Aging has also reported an 
increase in fraud cases targeting cash-strapped or unemployed older 
African Americans since the pandemic began. \19\
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     \18\ Federal Trade Commission. ``FTC and the State of Arkansas 
Charge Operators of `Blessing Loom' With Running an Illegal Pyramid 
Scheme''. Press release. June 17, 2021. Online: https://www.ftc.gov/
news-events/press-releases/2021/06/ftc-state-arkansas-charge-operators-
blessing-loom-running-illegal.
     \19\ NAACP. ``Elder Abuse: Another COVID-19 Evil'', March 1, 2021. 
Online: https://naacp.org/articles/elder-abuse-another-covid-19-evil.
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Scammers Are Exploiting a Lack of Protections for Payments Made via 
        Peer-to-Peer Services
    The ultimate goal for fraudsters is stealing money. This can take 
the form of direct payments from the victims to the scammers or 
stealing information that can then be used to obtain money through 
identity fraud or other schemes. Scammers routinely take advantage of 
new financial technologies to facilitate the transfer of funds. While 
no financial institution wants to be used as a vehicle for crime, there 
is often tension between businesses' desire to secure a particular 
payment vector from fraud while still allowing for legitimate 
transactions to be processed quickly.
    This tension is clear when it comes to the rapid growth of P2P 
payment platforms such as PayPal's Friends & Family and Venmo services, 
Square's Cash App, and Zelle, which is owned by a consortium of major 
banks. These services have attracted tens millions of users by allowing 
for free or very low-cost payments to be sent between consumers or from 
consumers to businesses. \20\ Even before the pandemic, roughly 4 in 5 
Americans (79 percent) has used mobile payment apps, by one estimate. 
\21\ Social distancing regulations put in place during the pandemic 
have supercharged consumers' embrace of these services, with the volume 
of payments expected to grow by roughly 37 percent in 2021. \22\ The 
explosive growth of these services is not expected to end any time 
soon. By 2023, it is estimated that more than $1 trillion will be 
transacted via P2P platforms. \23\
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     \20\ Kunst, Alexander. ``Statista Global Consumer Survey''. 
November 19, 2020. Online: https://www.statista.com/forecasts/997123/
peer-to-peer-payments-in-the-us.
     \21\ El Issa. ``Most Americans Go Mobile With Payment Apps--Here's 
How They Roll'', NerdWallet.com. February 26, 2020. Online: https://
www.nerdwallet.com/article/banking/mobile-payment-app-survey.
     \22\ Ho, Justin. ``P2P Payment Apps Are Booming, Thanks to the 
Pandemic'', Marketplace.org. March 15, 2021. Online: https://
www.marketplace.org/2021/03/15/p2p-payment-apps-are-booming-thanks-to-
the-pandemic/.
     \23\ Kats, Rimma. ``In 2023, More Than $1 Trillion Will Transact 
via Mobile P2P Apps'', Insider Intelligence. April 19, 2021. Online: 
https://www.emarketer.com/content/breaking-down-mobile-p2p-payments-
biggest-players.
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    Unfortunately, the same factors that are fueling the rapid growth 
of P2P payment platforms during the pandemic--low-cost, nearly 
instantaneous payments made via a mobile app--have made P2P a payment 
method of choice for scammers. In 2020, the FTC received nearly 62,000 
complaints from consumers who sent money to fraudsters via payment apps 
or similar services, with a total reported loss of $87 million. \24\ 
Consumer complaints to the Consumer Financial Protection Bureau (CFPB 
or Bureau) tell a similar story. A recent MASSPIRG Education Fund 
analysis found that more than 5,200 complaints about mobile or digital 
wallets were filed with CFPB over the 12-month period preceding April 
2021. Three companies--PayPal (which owns Venmo), Square (which owns 
Cash App), and Coinbase (a platform for buying and selling 
cryptocurrency)--accounted for more than two-thirds of all digital 
wallet complaints to the Bureau through April 2021. \25\ The Better 
Business Bureau has reported a similar increase in complaints involving 
P2P services. \26\
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     \24\ Federal Trade Commission. ``Consumer Sentinel Network Data 
Book 2020''. February 2021. P. 11. Online: https://www.ftc.gov/system/
files/documents/reports/consumer-sentinel-network-data-book-2020/csn-
annual-data-book-2020.pdf.
     \25\ Mierzwinski, Ed, et al. ``Virtual Wallets, Real Complaints''. 
MASSPIRG Education Fund. June 2021. P. 2. Online: https://masspirg.org/
sites/pirg/files/reports/MA-wallets.pdf.
     \26\ Zamost, Scott. ``Criminals Launder Coronavirus Relief Money, 
Exploit Victims Through Popular Apps'', CNBC.com. November 18, 2020. 
Online: https://www.cnbc.com/2020/11/18/criminals-launder-coronavirus-
relief-money-exploit-victims-through-popular-apps.html.
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    A complaint NCL received recently from a consumer in Pennsylvania 
is typical of the experience for far too many consumers who are induced 
to send money to fraudsters via P2P payment apps. In the process of 
trying to activate her Cash Card debit card for Square's Cash App 
service, the consumer's wife was directed to a phishing website where 
she inadvertently gave a scammer access to her Cash App account. The 
fraudsters quickly drained more than $5,000 from the consumer's 
account. When the consumer contacted his bank and Cash App to address 
the fraud he was told there was nothing that could be done because he 
his wife had given her permission for the transaction to the scammer.
    Another consumer from Massachusetts sent us a similar story last 
year. She thought she had booked a vacation rental in Provincetown and 
she was instructed by the ``owner'' of the property to send a $1,150 
deposit via PayPal. When she arrived at the address on the listing, she 
found that no such property existed. ``The neighbor told me he'd heard 
of many such scams in Provincetown,'' she wrote. \27\ She contacted 
PayPal twice to dispute the transaction, but was told that there was 
nothing that could be done to get her money back.
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     \27\ See, e.g., Martin, Sean. ``Vacationers Continue To Be Fooled 
by Rental Scams'', Provincetown Banner. August 15, 2019. Online: 
https://provincetown.wickedlocal.com/news/20190815/vacationers-
continue-to-be-fooled-by-rental-scams.
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    P2P services are aware that fraudsters use their services to obtain 
funds from their victims. An NCL review found that all of the major P2P 
platforms make some effort to educate their users about how to avoid 
scams. However, voluntary disclosures or consumer education alone are 
not terribly effective by themselves. Despite the platforms' efforts to 
educate users about the risks of sending money via P2P platforms, more 
than half of consumers surveyed by AARP incorrectly assumed that their 
payments would be protected if there is an error or fraud associated 
with the transaction. \28\
---------------------------------------------------------------------------
     \28\ AARP. ``AARP Survey Finds Majority of Americans Using Payment 
Apps Unaware of Danger Posed by Scammers''. Press release. May 12, 
2020. Online: https://press.aarp.org/2020-5-12-AARP-Survey-Finds-
Majority-of-Americans-Using-Payment-Apps-Unaware-of-Danger-Posed-by-
Scammers.
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    While P2P services do employ technological measures to stop 
fraudulent transactions, there is a business incentive not to introduce 
too many security roadblocks in the payment process. This is because 
P2P payment platforms, and their sky-high valuations, \29\ \30\ are 
dependent on maintaining large transaction volumes. P2P platforms' 
desire to reduce ``friction'' in the payments experience is in direct 
tension the need to prevent fraud. \31\ Yet if these platforms are 
making the decision to skew their services towards speed and 
convenience at the expense of safety and protection, they must take 
responsibility for those choices.
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     \29\ Hale, Kori. ``Hip-Hop's Role in Square's $40 Billion Cash App 
Business Success'', Forbes. September 22, 2020, Online: https://
www.forbes.com/sites/korihale/2020/09/22/hip-hops-role-in-squares-40-
billion-cash-app-business-success/?sh=10d7f8ee7489.
     \30\ Rudegeair, Peter. ``Cash App's Surge During COVID-19 Pandemic 
Fuels Square Stock'', Wall Street Journal. September 2, 2020. Online: 
https://www.wsj.com/articles/cash-apps-surge-during-covid-19-pandemic-
fuels-square-stock-11599039003.
     \31\ Doyle, Ciaran. ``Removing Friction and Fraud From P2P 
Payments'', IBM RegTech Innovations. December 6, 2018. Online: https://
www.ibm.com/blogs/regtech/removing-friction-and-fraud-from-p2p-
payments/.
---------------------------------------------------------------------------
    What is clear is that existing efforts to secure P2P payments are 
falling far short of what is needed. Major P2P platforms operators like 
Square, PayPal and Zelle do not publicly disclose their fraud rates. 
They should be required to do so. Analysts estimate that fraud rates on 
these platforms are three to four times higher than traditional payment 
methods such as debit and credit cards. \32\ Javelin Strategy and 
Research recently found that P2P services saw a 733 percent increase in 
fraud from 2016 to 2019. \33\ The popularity of P2P payments during the 
pandemic is also evident from conversations among fraudsters themselves 
on the Dark Web. In August 2020 alone, analysts noted that Cash App was 
mentioned more than 10,500 times, an increase of 450 percent from the 
previous year. Listings mentioning Venmo and Zelle increased by around 
50 percent in the same period. \34\
---------------------------------------------------------------------------
     \32\ Popper, Nathaniel. ``When Your Last $166 Vanishes: `Fast 
Fraud' Surges on Payment Apps'', New York Times. October 11, 2020. 
Online: https://www.nytimes.com/2020/10/11/technology/fraud-payment-
apps.html.
     \33\ Javelin Strategy and Research. ``Identity Fraud Losses 
Increase 15 Percent as Consumer Out-of-Pocket Costs More Than Double, 
According to 2020 Identity Fraud Report''. Press release. May 13, 2020. 
Online: https://www.javelinstrategy.com/press-release/identity-fraud-
losses-increase-15-percent-consumer-out-pocket-costs-more-double.
     \34\ Popper, Nathaniel. ``When Your Last $166 Vanishes: `Fast 
Fraud' Surges on Payment Apps'', New York Times. October 11, 2020. 
Online: https://www.nytimes.com/2020/10/11/technology/fraud-payment-
apps.html.
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    While no financial service is immune from fraud, protections for 
consumers who lose money to scammers on P2P apps are sorely lacking. 
When scammers obtain a consumer's bank account information and use it 
to initiate a preauthorized payment through the ACH system, or obtain 
debit card information and use it to initiate payment for fraudulent 
purchases, the consumer typically has limited liability for such 
transactions, thanks to the Federal Electronic Funds Transfer Act 
(EFTA), implemented through the Federal Reserve's Regulation E. \35\ 
Similar consumer protections exist for fraudulent credit card 
transactions exist under the Fair Credit Billing Act (FCBA). \36\ 
Thanks to these measures, consumers are protected, and credit and debit 
card issuers and participants in the ACH system have strong incentives 
to implement stringent antifraud countermeasures. The benefits to 
consumers of these regulatory incentives is clear. Today, it is not 
uncommon for a credit card holder whose account has been compromised to 
be notified by her bank before she even notices a fraudulent charge on 
her statement.
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     \35\ Federal Deposit Insurance Corporation. ``Laws and 
Regulations: Electronic Funds Transfer Act''. February 2019. Online: 
https://www.fdic.gov/news/financial-institution-letters/2019/
fil19009b.pdf.
     \36\ 15 U.S.C. 1666-1666j.
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    Unfortunately, while P2P platforms are covered by the EFTA, victims 
of fraud committed via P2P platforms are often unable to take advantage 
of the protections afforded. A big reason for this is a loophole in the 
EFTA that excludes payments initiated by the consumer from the 
protection for unauthorized charges (also known as ``fraud in the 
inducement'' or ``victim-assisted fraud''). \37\ This allows P2P 
services and banks to avoid liability for payments sent from consumers 
to scammers, even when such payments are induced by fraud. \38\
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     \37\ Cornell Law School Legal Information Institute. ``Fraud in 
the Inducement''. June 2020. Online: https://www.law.cornell.edu/wex/
fraud-in-the-inducement-Fraud-in-the-inducement-occurs-damages-or-
terminate-the-contract.
     \38\ Mierzwinski, Ed, et al. ``Virtual Wallets, Real Complaints''. 
MASSPIRG Education Fund. June 2021. P. 9. Online: https://masspirg.org/
sites/pirg/files/reports/MA-wallets.pdf.
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    The end result of the loophole for fraudulently induced payments 
made via P2P platforms is that the liability risk for fraud is 
transferred from P2P platforms and banks to consumers themselves. Yet 
it is the platforms that have designed systems that encourage this type 
of fraud and who set the level of fraud they are willing to tolerate. 
Moreover, institutions are far more able to handle the costs of 
protecting consumers from small amounts of fraud in the system, whereas 
a single instance of fraud can be devastating to a consumer. 
Unfortunately, the only recourse for many victims of fraud committed 
via P2P platforms is to throw themselves at the mercy of the banks or 
P2P platforms and beg to be made whole. Unfortunately, thanks to the 
lack of legal protections, it is far too easy for the banks and P2P 
platforms to simply tell fraud victims that they are out of luck.
    Indeed, another problem is that most financial institutions are 
taking an unduly narrow view of their error resolution responsibilities 
under the EFTA. When consumers call to complain about a fraudulently 
induced payment, or about a mistake such as entering the wrong amount 
or wrong cell phone number for the recipient, many institutions are 
refusing to treat that as an error and refusing to investigate or to 
try to resolve it. Yet there is nothing in the EFTA or Regulation E 
that excludes consumer errors from the definition of ``error.'' Even if 
a consumer might ultimately be liable for a payment because it was 
initiated by the consumer and thus is not ``unauthorized,'' that does 
not mean that institutions do not have a duty to investigate and try to 
resolve the matter. A refusal to take these fraud reports and to pass 
them on to the receiving institution also deprives that institution 
that holds the scammer's account (or that of a money mule who 
themselves may be a victim of fraud) of the information needed to put a 
hold on the funds or shut down that account to prevent further fraud.
    Difficulty in obtaining appropriate customer service is especially 
acute with app-based services that rely on automated communications and 
do not make live customer service available or adequately staff 
customer service lines. Problems that consumers have experienced with 
neo-bank accounts like Chime show the importance of making human beings 
available to address problems when things go wrong. \39\
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     \39\ Kessler, Carson. ``A Banking App Has Been Suddenly Closing 
Accounts, Sometimes Not Returning Customers' Money''. ProPublica. July 
6, 2021. Online: https://www.propublica.org/article/chime?utm-
source=sailthru&utm-medium=email&utm-campaign=dailynewsletter&utm-
content=feature.
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The Federal Reserve Should Ensure That FedNow Is Safe for Consumers 
        Before the System Is Launched
    The Federal Reserve Board (FRB) is in the middle of building a new 
faster payment system called FedNow, which will be an alternative to 
Zelle and other private systems. \40\ The FRB has recently proposed one 
set of rules governing the system. \41\
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     \40\ Tahyar, Margaret et al. ``FedNow: The Federal Reserve's 
Planned Instant Payments Service'', Harvard Law School Forum on 
Corporate Governance. August 31, 2020. Online: https://
corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-
instant-payments-service/.
     \41\ FRS-2021-0214-0001. Online: https://www.regulations.gov/
document/FRS-2021-0214-0001.
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    We see the value in the FRB's decision to build a real time payment 
system. It is imperative, however, that the inadequacies in consumer 
protection with regards to fraudulent P2P payments not be exacerbated 
as the FRB continues development of its FedNow service. \42\ The rules 
proposed to date do not address the problems discussed in these 
comments.
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     \42\ Letter from Americans for Financial Reform Education Fund, et 
al., to Board of Governors of the Federal Reserve System. November 7, 
2019. Online: https://www.nclc.org/images/pdf/cons-protection/
coalition-letter-interbank-settlements.pdf.
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    As a public body, the FRB has an especially great responsibility to 
make sure that a system it designs and runs is safe. Protections in the 
FedNow system can be a model for other P2P systems. Congress has a 
critical role to play by insisting that the FRB meets this challenge. 
Now, during its design phase and before it is deployed to the public, 
these challenges must be addressed.
New Protections Are Needed To Protect Consumers From Fraud and Errors 
        on P2P Payment Platforms
    The lack of consumer protections for users of P2P payment platforms 
must not be ignored. It is clear from their explosive growth that P2P 
payment apps are here to stay. It is equally clear that absent 
regulatory incentives, effective self-regulation by the P2P services 
will be stymied in the name of protecting transaction volume growth. 
NCL has spoken with P2P platforms and urged them to offer far more 
robust fraud protection, but so far we have seen little improvement. 
The P2P services will continue to rely on marginally effective warnings 
and disclosures to consumers--an old-fashioned tactic--rather than 
embracing their responsibility to design systems for safety and using 
modern artificial intelligence, machine learning, data analytics, and 
other methods to prevent and remedy fraud.
    To ensure that P2P platforms are secure for their users and do not 
continue to be powerful tools for fraudsters, action by Congress is 
urgently needed.
    Specifically, we urge Congress to:

    Enact legislation to expand the definition of 
        ``unauthorized electronic fund transfer'' in the Electronic 
        Funds Transfer Act to cover fraudulently induced payments, with 
        ultimate liability resting with the institution that received 
        the fraudulent payment;

    Push regulators to require P2P platforms to investigate 
        errors and fraud, even in cases where the consumer sent a 
        payment erroneously or as a result of fraud in the inducement;

    Urge bank regulators to emphasize fraud prevention and 
        remediation as part of financial institutions' know-your-
        customer duties;

    Enact legislation to require P2P platforms to prominently 
        display warning about fraudulent use of P2P payments and how to 
        avoid scams;

    Require P2P platforms to provide and prominently display a 
        customer service telephone line and respond to customer service 
        inquiries in a timely manner; and, \43\
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     \43\ Note: The California legislature is currently considering AB-
1320, which contains similar requirements. Online: https://
leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill-
id=202120220AB1320.

    Insist that the Federal Reserve promulgate rules for the 
        design of the FedNow payments service that prioritize safety 
        and security of payments.
Conclusion
    Chairman Warnock, Ranking Member Tillis, and the Members of the 
Subcommittee, we thank you for your continuing work to protect 
consumers and for holding this hearing. On behalf of the National 
Consumers League, thank you for including the consumer perspective as 
you consider these important issues.
                                 ______
                                 
                 PREPARED STATEMENT OF RACHEL GRESZLER
                Research Fellow, The Heritage Foundation
                             August 3, 2021

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

               RESPONSES TO WRITTEN QUESTIONS OF
              SENATOR CORTEZ MASTO FROM LIZ COYLE

Q.1. What are the risks of wire transfer fraud schemes 
connected to real estate closings?

A.1. New payment system technologies enabling faster payments 
directly from the payer to the payee offer potential benefits 
to consumers, but also may increase the risk of fraud or simply 
very costly mistakes. These increased risks are exposing 
consumers to fraudulent schemes tied to real estate closing 
transactions. Scammers hack into lenders' computers to access 
email addresses tied to pending transactions and send 
fraudulent emails tricking home buyers into wiring funds to the 
scammers' accounts rather than the intended financial 
institution. According to the National Credit Union 
Administration (NCUA), wire transfer scams involving real 
estate closings are increasing, based on a 2016 report of the 
Federal Bureau of Investigations.

Q.2. What can financial institutions do to alert their 
customers to suspicious transactions?

A.2. Federal and State regulators, financial institutions, 
payment system developers and other impacted or interested 
stakeholders should prioritize the development and 
implementation of cybersecurity, notification, fraud detection 
and prevention, and consumer awareness systems and regulations. 
Financial institutions should install stronger fraud and error 
resolution protections for their customers, including requiring 
the use of two-factor authentication. In 2021, the Federal 
Financial Institutions Examination Council (FFIEC) issued 
guidance titled Authentication and Access to Financial 
Institution Services and Systems ``to provide financial 
institutions with examples of effective risk management 
principles and practices for access and authentication.''

Q.3. How can financial institutions help people get their 
stolen funds returned?

A.3. Financial institutions should prioritize prevention to 
mitigate risk. Institutions should be held responsible for 
returning fraudulently stolen funds to customers. The Cyber 
Crime Support Network is an excellent resource for the 
industry, regulators, and victims of cybercrime.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR CORTEZ MASTO FROM JOHN BREYAULT

Q.1. What are the risks of wire transfer fraud schemes 
connected to real estate closings?

A.1. Wire transfer fraud during real estate closings is a real 
risk to consumers that can be financially and emotionally 
ruinous. According to the Internet Crime Complaint Center, 
there were 13,638 victims of wire fraud in the real estate/
rental sector in 2020 (a 17 percent increase over 2019), with 
losses of more than $213 million. \1\ According to a recent 
survey by the American Land Title Association, cybercriminals 
attempted to trick employees into wiring funds to a fraudulent 
account in a third of all real estate and mortgage 
transactions. Full recovery of lost funds was only possible in 
29 percent of cases involving wire fraud targeting title 
agencies. In 40 percent of the cases, less than 10 percent of 
the funds were recovered. \2\
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     \1\ Federal Bureau of Investigation Internet Crime Complaint 
Center. ``Internet Crime Report 2020''. March 17, 2021. Online: https:/
/www.ic3.gov/Media/PDF/AnnualReport/2020-IC3Report.pdf.
     \2\ American Land Title Association. ``Survey: Title Professionals 
Targeted for Wire Fraud in a Third of all Transactions''. April 20, 
2021. Online: https://blog.alta.org/2021/04/survey-title-professionals-
targeted-for-wire-fraud-in-a-third-of-all-transactions.html.
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    Wire fraud targeting real estate closings affects 
participants in all phases of the closing, including title 
companies, law firms, real estate agents, buyers, and sellers. 
A typical scenario begins with a hacker gaining access to a 
title company's or lender's email server and searching for 
upcoming real estate closings. \3\ Fraudsters may also search 
Multiple Listing Service websites such as Trulia or Zillow to 
identify pending home sales and the associated parties in those 
transactions. \4\ The fraudsters then send spoofed emails to 
participants in one or more closings. The emails may appear to 
come from a transaction participant and typically contains 
instructions directing the recipients to change the payment 
type and payment location so that payments go to accounts 
controlled by the fraudsters. If the funds are sent to a 
fraudulent account, they are typically quickly obtained by the 
scammers via cash or check withdrawals. Because the 
disbursement of funds from the fraudulent accounts tend to 
occur so quickly, it is often difficult or impossible for the 
payment to be canceled or for lost funds to be recovered when 
the fraud is discovered. \5\
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     \3\ National Credit Union Administration. ``Wire Transfer Scams 
Involving Real Estate Transactions Are Increasing''. 2018. Online: 
https://www.ncua.gov/newsroom/ncua-report/2018/wire-transfer-scams-
involving-real-estate-transactions-are-increasing.
     \4\ Bay National Title Company. ``Real Estate Wire Fraud: How To 
Stay Protected When Buying a Home''. Online: https://www.bntc.com/wire-
fraud/.
     \5\ Federal Bureau of Investigation. ``Public Service 
Announcement: Business E-mail Compromise the 12 Billion Dollar Scam''. 
July 12, 2018. Online: https://www.ic3.gov/Media/Y2018/PSA180712.

Q.2. What can financial institutions do to alert their 
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customers to suspicious transactions?

A.2. Consumer education at the beginning and repeated warnings 
throughout the closing process can help increase consumer 
awareness of this scam. For example, financial institutions 
should provide alerts to borrowers to educate them about the 
warning signs of real estate wire fraud at multiple points 
during the home-buying process. Financial institutions should 
also work with borrowers, title agents and other participants 
in the real estate closing process to verify that wire 
transfers are not being sent to fraudulent accounts. Resources 
such as the American Land Title Association's ``Outgoing Wire 
Preparation Checklist'' and ``Rapid Response Plan for Wire 
Fraud Incidents'' are valuable resources for helping 
participants in real estate transactions reduce their risk of 
wire fraud. \6\
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     \6\ American Land Title Association. ``Protect Your Money''. 
Online: https://www.alta.org/business-tools/wirefraud.cfm.

Q.3. How can financial institutions help people get their 
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stolen funds returned?

A.3. Financial institutions should make consumer education 
about what do when wire fraud is suspected a regular part of 
their interactions with borrowers. Acting quickly when wire 
fraud occurs is a key factor in increasing the chances that 
funds sent via fraudulent wire transfers can be recovered. 
Congress should also consider legislation that would redefine 
the Federal Reserve's definition of ``unauthorized 
transactions'' to cover incidents where consumers are induced 
to send money for fraudulent purposes.

Q.4. How can financial institutions monitor accounts for 
suspicious activities?

A.4. Financial institutions should ensure that their fraud 
detection systems are as up to date as possible. While no 
system is foolproof when it comes to detecting and preventing 
wire fraud, financial institutions must make it a priority to 
invest in antifraud controls that reduce the risk of wire 
fraud.

Q.5. Financial institutions know that multiple transactions 
under $10,000 may be suspicious; should multiple transactions 
of smaller amounts also be flagged for fraud if they seem 
suspicious?

A.5. Yes. Multiple multithousand-dollar transactions over a 
short period of time, particularly if the source is an account 
that does not typically engage in such transactions, should be 
a signal of potential fraud. While transactions smaller than 
$10,000 may not be indicative of wire fraud associated with 
real estate closing, fraudsters are known to request payment 
via wire transfer for many other types of fraud. Such 
transactions may also indicate that the sending account in 
engaged in activity consistent with ``money mules'' or other 
accomplices (witting or otherwise) in fraud.

Q.6. What are the responsibilities for financial institutions 
to question their customers on suspicious withdrawals?

A.6. Financial institutions often train their frontline 
employees to question customers when the customer makes 
suspicious withdrawals. However, fraudsters are known to 
quickly adapt to such tactics, even coaching victims on what to 
say in response to questioning by financial institution 
employees. We would also encourage financial institutions to 
consider whether certain customers are at high risk of engaging 
(knowingly or not) in fraudulent transactions and develop 
systems to appropriately challenge suspicious transactions by 
those who are at high risk.

Q.7. Are there transactions where a second person, like a 
spouse or adult child, should be contacted to verify 
withdrawals?

A.7. For customers who are at high risk of being victims of 
fraud, we believe it is appropriate for financial institutions 
to contact trusted parties such as spouses or adult children to 
verify withdrawals before such withdrawals are processed.

Q.8. Do financial institutions flag overseas withdrawals for 
accounts that do not typically have them, especially for people 
over 65 years of age?

A.8. I am not aware of specific financial institutions that do 
this or regulations that would require financial institutions 
to flag such withdrawals. However, I believe that this is an 
area that would be ripe for further investigation by the 
Committee and regulatory agencies.

Q.9. What kind of holds should financial institutions have for 
overseas transactions that seem unusual?

A.9. A key benefit for fraudsters engaged in wire fraud is that 
received funds can often be obtained quickly, with little 
recourse for the sending party if fraud is discovered or 
suspected after the fact. For high-risk accounts, we believe 
that controls should be put in place that would place holds on 
overseas transactions that have indices of potential fraud. 
This would give customers and sending institutions additional 
time to investigate and verify suspicious transactions before 
fraudsters are able to obtain the funds.

Q.10. How can financial institutions flag fraud where the 
scammer has misled the victim and the victim thinks the 
transactions are legitimate?

A.10. Financial institutions should be willing to place holds 
on transactions that have indices of fraud, even if the 
customer thinks that the transaction is legitimate. However, we 
believe that a comprehensive solution should also include new 
protections that would place more liability on financial 
institutions when account holders are induced to authorize 
sending money to fraudsters. Such liability shifting would not 
only make it more likely that defrauded consumers can be made 
whole, it would also create a powerful incentive for financial 
institutions to invest in systems that would reduce the risk of 
fraud occurring in the first place.

Q.11. What legal assistance is available for victims of fraud? 
How do victims know they can--and should--file complaints with 
local governments, legal aid, the Federal Trade Commission, the 
Consumer Financial Protection Bureau, etc.?

A.11. It is too often incumbent on fraud victims themselves to 
seek out legal assistance. Fortunately, agencies like local 
police departments, State Attorneys General, legal aid service 
providers, and Federal resources from the Federal Trade 
Commission and the Consumer Financial Protection Bureau do a 
relatively good job at making their services findable online. 
However, given the significant number of consumers who either 
lack access to the Internet or who are uncomfortable with or 
unable to use technology, there is always the need for 
providers of legal assistance for fraud victims to proactively 
reach out to victims and potential victims of fraud.