Nail x { P se qew Z po312124, 4:22 PM Brown, Cortez Masto, Warren Sound Alarm on Check Washing Fraud | United States Commitle on Banking, Housing, nd Urban .. -MARCHOB, 2023 Bro’ c iG WASHINGTON, D.C. — Today, Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, along with Committee members Senators Catherine Cortez Masto (D-NV) and Elizabeth Warren (D-MA), sent a letter to the American Bankers Association (ABA) expressing concerns regarding increasing check fraud scams, which cost consumers over $800 million last year. “Check washing has become an elaborate and organized method of successfully scamming consumers and banks,” wrote the Senators. “In light of the many concerns raised by consumers, we are concerned by banks’ inability to effectively identify washed and other types of fraudulently-altered checks, timely process claims, and reimburse those that have lost thousands of dollars. Consumers should not be left waiting for their accounts to be made whole again. It is the responsibility of banks to properly address these concerns and to reimburse consumers in a timely manner.” Brown has long fought to protect consumers from financial fraud. In July, Brown held a hearing on fraud and scams in the cryptocutrency market. And in September, Brown sent a letter to Meta following reports of a significant number of crypto scams on social media platforms. A copy of the letter is available here and below: We write to express our concerns regarding the devasting effects that “check washing” scams are having on working families across the nation. Check washing occurs when an individual steals a check, usually from the mail system, and washes it in household chemicals to remove the ink. Thieves will then change the payee name and the dollar amount, followed by fraudulently depositing the check, leaving consumers scammed out of potentially thousands of dollars.[1] hitpe:ihww.banking senate, govinewstoomimalorty/brown-cortez-masto-werrer-alarm-check-washing-faud wa311224,422PM Brown, Cortez Mast, Warren Sound Alarm on Check Washing Fraud | United States Committee on Banking, Housing, and Urban Check washing has become an elaborate and organized method of successfully scamming consumers and banks.{2] In 2022, banks saw an 84% increase in check fraud{3], costing consumers an estimated $815 million.{4] The increase in check fraud has left many Americans in difficult situations where thousands of dollars are stolen from them. [5] Making matters worse, banks are delaying the process of resolving their fraud claims by weeks and even months.[6] According to reports, banks fail to properly identify fraudulently-altered checks and when they do- they ultimately fail to timely reimburse victims. Reports suggest that primarily larger banks shift liability to other banks that deposit washed and other fraudulent checks, thereby entering a drawn-out process of resolving issues of liability and reimbursement [7] Delays in resolving claims of fraud further exacerbates the stress that American families are under - whether it’s their inability to cover bills, rent, groceries, or being left in the dark as to when they will be reimbursed. Such circumstances harm consumers and their trust in our financial institutions to hold and secure their funds. In light of the many concerns raised by consumers, we are concerned by banks inability to effectively identify washed and other types of fraudulently-altered checks, timely process claims, and reimburse those that have lost thousands of dollars. Consumers should not be left waiting for their accounts to be made whole again. It is the responsibility of banks to properly address these concerns and to reimburse consumers in a timely manner. To that end, we urge you to expeditiously come up with a plan to assist your members in addressing this problem by reducing check fraud and resolving fraud claims. Please provide us with a briefing on how you plan to address this issue with your members, by March 17, 2023. ‘Thank you for your prompt attention to this important issue. aH https ww banking senate. govinewsroom/majortybrown-cortez-masto-warren-alarm-check.washing-fraud 22UNTEDSTATES + THE ZEN OF IT By Evan Schuman, Contributing Columnist, Computerworld UL, 2022 3:00 AM POT OPINION Are hanks quietly refusing reimbursements to fraud victims? There are disturbing reports that some major financial institutions are no longer crediting back all fraudulent. transactions, even when the victim has filed a police report. This move by these financial institutions will soon come back to bite them. There are some scary reports popping up that various major financial institutions no longer credit back all fraudulent transactions, even when victims file a police report. If true, it's a disastrous move that will painfully hurt the institutions. Let's look a recent New York Times report on the problem: “Under a 1978 federal rule called Regulation E, banks are required to make clients whole if their money is stolen from a consumer account through an electronic payment initiated by another person. Since Reg E was written well before payment apps existed, the Consumer Financial Protection Bureau last year issued guidelines saying that the law covered all person-to-person online payments. The bureau clarified that all unauthorized online money transfers — meaning any payment initiated by someone other than the ion — were the bank's liability. But despite the updated guidance, banks in many cases are refusing to refund customers who claim — often with supporting customer and done without the customer's permi documentation — that money was stolen from their accounts. The banks rarely provide clear explanations for their decisions, leaving victimized customers with little recourse.” [How to choo: the right UEM platform ] The story cited numerous examples of customers, including some who filed police reports, whose financial institution had denied their fraud filing, Some, but not all, of those businesses reversed that policy after a reporter called.That's wrong on so many levels and it sounds less like “we reviewed the decision and discovered an error” and more like, “Uh-oh. We just got caught.” Let's set aside that the law is clear and banks and other institutions can’t simply refuse to reimburse customers because they don't want to. Instead, let's explore why such a move is counter-productive and self-destructive. ‘Some quick background: Many of the issues here are similar to the major credit card brands’ (MasterCard, Visa, AmericanExpress, Discover, etc.) Zero Liability policy. That rule was put in place decades ago, Its goal was not directly to protect consumers, but to boost e-commerce revenue by making those consumers comfortable using their credit and debit cards for transactions. But even after those consumer fears vanished, the program stuck, That program simply said that if a card transaction is fraudulent, the relevant Fl would reimburse it fully. It technically initially said everything after $50, but the industry ended up paying for all of the fraud. (Note: That program does a lot more to protect credit card purchases than debit card purchases, but that’s another story. In short, avoid ever using a debit card online.) SponsoredPost Sponsored by FreshWorks 4 industries where chatbots will have the biggest impact Back to the current situation. The banks that won't pay all fraud transactions are handing rivals in the industry a massive gift. Those competitors can proudly say "Unlike Capital One, Bank of America, Wells Fargo and Chase (the banks identified in the Times piece), we protect all of our customers. If you are ripped off, we will reimburse that charge. And if you send us a copy of a police report you filed, we'll even waive an investigation, other than confirming the police report was filed.”It gets worse, What do you think happens if even more institutions stop covering fraud losses? The losses will move from them to their customers. Given that most professional thieves fear big banks a lot more than they do individual victims, fraud will accelerate even more than it already has. Then there are the lawsuits. For the most part, consumers who got ripped off by thieves had little legal action they could take against their bank, whose lack of cybersecurity protections often enabled the fraud. Other than a ruling that they could, maybe, get reimbursed for the time spent cleaning up the mess, few companies suffered sufficient out-of-pocket losses to make a trip to civil court worthwhile or even likely to succeed. If this bad behavior continues, that all changes. With five-figure losses (or more), consumers are more likely to sue. And given the size of these banks, those lawsuit will quickly morph into class-action they'll have an excellent chance of winning. The fraud described here is mostly P2P digital transactions, such as Zelle, Venmo, Cash App and PayPal. That should make no difference. From the customer's perspective, it’s all payments. They expect to be protected. Evan Schuman has covered IT issues fora lot longer than he'llever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek, Computerworld and eWeek. van can be reached at eschuman@thecontentfirm.com and he can be followed at twitter.com/eschuman, folow 2 & VY in ® Copyright © 2022 1G Communications ne. It's time to break the ChatGPT habit SPONSORED LINKS Want to justify your IT investments faster? IDC reports on how to measure business impact. Read this IDC spotlight to learn what commonly prevents value realization — and how to solve it ‘Copuright © 2026 10G Communications ne.32/24, 4:14 PM ‘Cases of check fraud escalate dramatically, wih Americans warmed not to mail checks if possible |AP News 7 r { Woles, photo frecagency pusmess Cases of ¢! not to imal aUcally, Wilh Americar FLE- Present Donal Trumps ame is pinto astm hckisswedy tel RS tah combate ads ecanoicefects of the COMD-19uthreakin ths p23 220 pottaknin Sandrtorn arin the panei everett checks brane an tect tape for cin. The pote has el gtten wars and esa autres and tank oficial waring Americas to aod maling chek pos r test to use2 seer al rp sachasinsie the posto, (P Pat a. Fle) Read More ‘BY KENSWEET Published 5:41 PMEDT, June 12, 2023 NEW YORK (AP) — Check fraud is back in a big way, fueled by a rise in organized crime that is forcing small businesses and individuals to take additional safety measures or to avoid sending checks through the mail altogether. Banks issued roughly 680,000 reports of check fraud to the Financial Crimes Enforcement Network, also known as FinCEN, last year. That's up from 350,000 reports in 2021. Meanwhile the U.S. Postal inspection Service reported roughly 300,000 complaints of mail theft in 2021, more than double the prior year's total. |ntipsvfapnews.convartclecheck-freud-banks-organized-crime-Sf033bSbd87e2cbeb824ab4265a916 wns/t2724, 4:14PM Cases of check feud escalate dramatically, wih Americans wamed not to mall checks lf possible | AP News Early in the pandemic, government relief checks became an attractive target for criminals. The problem has only gotten worse and postal authorities and bank officials are warning Americans to avoid mailing checks if possible, or at least to use a secure mail drop such as inside the post office. Meanwhile, as the cases of fraud increase, victims are waiting longer to recover their stolen money. Check usage has been in decline for decades as Americans have largely switched to paying for their services with credit and debit cards. Americans wrote roughly 3.4 billion checks in 2022, down from nearly 19 billion checks in 1990, according to the Federal Reserve. However, the average size of the checks Americans write rose from $673 in 1990 — or $1,602 in today’s dollars — to $2,652 last year. Letter carrier robberies continue as the US Postal Service, union and lawmakers seek solutions hitps:/apnews.comlarticle/check-fraud-banks-organized-crime-51083093bdB7e2cbebSZ>4ab4865a016ar12124, 4:14 PM ‘Cases of check fraud escalate dramaticaly, with Americans warmed not to mall checks i possible | AP News “Despite the declining use of checks in the United States, criminals have been increasingly targeting the US. Mail since the COVID-19 pandemic to commit check fraud,” FinCEN wrote in an alert sent out in February. Checks are still frequently used by small businesses. Eric Fischgrund, who runs FischTank PR, 2 30-person public relations firm in New York, had about 15 checks that were being mailed to him from clients stolen after they all went through the same Postal Service distribution center. Ten of them were successfully cashed by criminals, ‘The checks were stolen in March and Fischgrund became aware of the problem in April, when several of his clients who were never late missed payments. The Postal Service investigated and Fischgrund has recovered about 70% of the revenue, but some of the cases haven't yet been resolved, ‘According to the investigator on the case, the perpetrators used technology that melted ink in the “to” field of the checks so they could write in fake names. FischTank instructed all ts clients to change their paper format because it was dealing with a check fraud issue. Fischgrund said he'd never previously had an issue with check fraud in the nearly 10 years he has run his own business. Now he has a clause in invoices and new client contracts that asks for electronic payments only. “| don't think we'll ever go back to asking for checks as an option,” he said. Today's check fraud criminals are not small operations, or lone individuals like the Leonardo DiCaprio character in the 2002 movie “Catch Me If You Can,” counterfeiting checks from his hotel room and apartment. They are sophisticated criminal operations, with participants infiltrating post office distribution centers, setting up fake businesses or creating fake IDs to deposit the checks. “Walkers,” or people who actually walk in to cash these checks, receive training in how to appear even more legitimate. hitpe:fapnews.cornarticl/check raud-banks-organized-crme-S/0S3bESbdBTe2cbeb8Z>4ab42652016 ans¢taie4, 4:14 PM Cases of check fraud escalate dramatically, with Americans warned no! to mail checks if possible | AP News In one case in Southern California last year, nearly sixty people were arrested on charges of committing more than $5 million in check fraud against 750 people. Criminals are getting the checks or identification information by fishing mail out of U.S. postal boxes, loo for envelopes that appear to be either bill payments or checks being mailed. ‘The most common type of check fraud is what's known as check washing, where a criminal steals the check from the mail and proceeds to change the payee's name on the check and, additionally, the amount of money, ‘Some criminals are going further and using the information found on a check to gather sensitive personal data on a potential victim. There have been reports of criminals creating fake entities out of personal data obtained from a check, or even opening new lines of credit or businesses with that data as well. This allows fraudsters to create new checks using old account data. That's why check fraud experts are saying Americans should avoid sending checks in the mail or at least take additional safety steps to avoid becoming a victim. “if you need to mail a check, do not put a check in your residential mailbox and raise the flag to notify the postman. Drop off checks inside a post office if you have to,” said Todd Robertson with Argo Data, a financial data provider. Banks, keenly aware of the problem, are increasingly watching for signs of fraud at branches and through mobile check deposit services, including large check deposits. They're training branch employees to take steps such as looking at check numbers, because checks are typically written in order, or noticing when a check is being written for a much larger amount than the customer's previous history would indicate. Banks also now deploy software at their branches that can tell how risky a check might be. hitps/fapnews.convartcle/check-traud-banks-organized-crime-Sf033b93bd87e2cbeb62b4ab4865291611224, 4:14PM (Cases of chock fraud escalate dramatically with Americans wamed not to mail checks i possibie| AP News But those systems become moot if criminals are able to persuade tellers — often at the front lines for check acceptance — to look past any red flags. “These fraudsters are much more aggressive than they were in the past, and they are pressuring tellers to override internal systems that might flag a potentially suspicious transaction,” Paul Benda, a senior vice president at the American Bankers Association. Banks generally reimburse customers if they are victims of check fraud within days. However, due to the growing number of fraud cases, refunds have slowed down in recent months. In March, a trio of Democratic Senators asked the banking industry to be more prompt in reimbursing victims of check fraud whenever possible. Another safety tip for businesses is to opt in to a bank's “positive pay” services with a business checking ‘account. Positive pay means you pre-authorize checks for a certain amount as well as the check number, cutting down criminals’ ability to wash the check and withdraw money for an amount that isn’t pre- authorized. AP Small Business Writer Mae Anderson contributed to this report from New York. KEN SWEET Kens rational writer on banking and consumer Issues. xe ADVERTISEMENT btips:vepnews.comnlartcle/check-fraud-banks-orgarized-crime-S1033093bd87e2cbeb82>4ab48652916—, ae . oats” Geaearres. Anited States Senate sae eee ANAL WARIO GEOM {kev CRAMER, NORTH DAKOTA COMMITTEE. SR EARNS, HOUSING, AND WASHINGTON, DC 20510-6075 February 15, 2024 ‘Mr. Cameron Fowler CEO Early Waring Services, LLC 16552 North 90th Street Scottsdale, AZ 85260 Dear Mr. Fowler: ‘We remain concemed about scams and fraud on Zelle, the instant payment platform operated by Early Warning Services, LLC, and co-owned by seven Big Banks (Bank of America, Truist, Capital One, JP Morgan Chase, PNC Bank, U.S. Bank, and Wells Fargo). We write to ask you to publicly clarify your reimbursement policy for imposter scams, add more categories of scams that consumers can reimbursed for, and that you streamline the process for customers to report ‘unauthorized transactions, scams, and fraud on Zelle. In November 2023, it was reported that Zelle began to reimburse customers who are subject to imposter scams, a scam in which someone impersonates a representative at a financial institution, a business, utility, ora govemmental entity to trick a consumer into sending money. However, it remains unclear whether this reported policy is standard practice because the details have not been made public. Zelle's webpage says: “Because you authorized the payment [in a scam], you may not be able to get your money back”? and that “[q]ualifying imposter scams may be eligible for reimbursement”; it docs not specify which categories of imposter scams may qualify or what steps victim must take to exercise their rights under the reimbursement policy. Since it appears that Zelle has not shared any specific information about its reimbursement policy, customers may not ‘know that they can be reimbursed and, thinking they may not get any help, may not report these scams. Zelle should clarify whether all participating banks and credit unions are required to reimburse customers who are victims of “qualifying” imposter scams and make that policy public. Zelle should also expand the reimbursement policy to include more types of scams thet occur on the platform. Itis also currently unnecessarily complicated to report fraud and scams to Zelle. Zelle’s website contains separate instructions for reporting fraudulent transactions, on the one hand, and scams, on the other hand. One set of complaints is reportable through a webpage, while another is reportable + “Payments app Zelle begins refunds for imposter scams after Washington pressure”, November 2013, hatosv/Awww.xeuters.comi/technolo »v/cybersecurity/payments-ay9-zelle-bevins-refsnds-imoster-scams-after- swashington-pressure-207 2 “Fraud & Scams Overview” hiltps:/;www.zellepa ..com/safety-education/fraud-scams-overview 3 “Frequently Asked Questions: I believe I've been a victim of an imposter scam. Who should I contact?" Inrtps:/fweww.zellepay.com/faol-believe-ive-been-victim-imposter-seam-who-should-i-contact‘only by phone.‘ Many customers are unlikely to know which category their transaction falls into and therefore which form to use. This process is unnecessarily cumbersome from the victim's perspective, which may limit their ability to receive reimbursement and render the new policy less effective. Meanwhile, we are not aware of an easy way to report a transaction directly from the bbank or credit union app in which the customer made the payment. Zelle should make the reporting process for fraud and scams easier and more streamlined for customers. ‘We would appreciate responses to the following by March 13, 2024. 1. Will Zelle oxpand its reimbursement policy to include more types of scams that occur on the platform? 2. Will Zelle commit to publicly sharing its policy of reimbursing customers who are victims of “qualifying” imposter scams? 3. Will Zelle commit to making the reporting process for fraud and scams less cumbersome for customers? 4, Since Zelle began to reimburse customers for “qualifying” imposter scams in November 2023, please provide: a. The number of claims of reported imposter scams and the total dollar value of these transactions. b. The total number of cases where Zelle provided refunds to the customers who reported these imposter scams, the total dollar value of these refunds, and the average and maximum length of time Zelle took to issue a refund. 5. What types of scams are most common on Zelle? For each of the last five full calendar years, please provide: a. The number of claims of reported scams, the types of these reported scams, and the total dollar value of these transactions, b. The total number of cases where Zelle provided refunds to the customers who reported these scams, the total dollar value of these refunds, and the average and maximum length of time Zelle took to issue a refund, 6. In October 2022, Zelle contested reports of rampant fraud and scams on its platform.’ How many reports of fraud has Zelle received from its customers for each of the last five full calendar years? For each year, please provide: a. The total number of transactions reported as unauthorized by customers using Zelle and the total dollar value of these transactions. b. The total number of cases where Zelle provided refunds to customers who reported unauthorized transactions and the total dollar value of these refunds. * “Report a Scam”, hitnsif/www.zellesev.com/suportireport-scamn. This webpage notes: “Do not use this form to report unauthorized transaction(s) that occurred due to account loss or theft. + “Barly Waming Releases Statement Regarding Receut Reports of Fraud and Scam Rates”, October 2022, ‘atips://www.zellenay:com/press-releases/earl:=Waring-releases-statement-reyarding-recent-reaorts- fraudThank you for your consideration and your timely response, Sincerely, Glued Broun itt dn Sherrod Brown Blizlbeth Warren Chairman United States Senator Senate Committee on Banking, Housing, and Urban Affairs ‘Uniléd States Senator316124, 6:17 PM Reimbursing fraud vitims: how has big tech financial vices shied the responsibilty to banks? : Keystone Law KEYSTONE LAW Reimbursing fraud victims: how has big tech financial services shifted the responsibility to banks? The May 2023 Fraud Strategy states that the Government “will ensure victims of fraud are reimbursed and supported”. This will, in part, be achieved by “changing the law so that more victims of fraud will get their money back’. ‘The Governments under pressure to make tech giants compensate fraud victims and bear some of the losses, in addition to banks and building societies. Yet the Payments Systems Regulator (PSR) plans only to hold sending and receiving banks or building societies liable (in certain circumstances), as things stand. ‘The Online Safety Bll which is making its way through Parliament and will soon become an Act, has provisions to make tech companies responsible for hosting scams and fraudulent content, This Government strategy only proposes reaching a voluntary agreement with the tech sector to tackle scams but does not mention any responsibility for helping compensate victims, only fines for tech companies who break the rules. ‘There is no current legislative or regulatory framework obliging the tech sector to support the prevention of these crimes, as there is for banks. What can banks do? Banks are asking for more to be done to prevent these scams, demanding further action from tech companies, social media and politicians. The banks have called for @ victim reimbursement fund to be financed by all firms whose systems and platforms are usec to perpetrate scarns, including tech companies and banks, Barclays has reported that 88% of these scams, which cause victims to lose £1,000 on average, start on social media platforms. Tech companies and banks operate under different regulatory frameworks, and their responsibilities regarding fraud reimbursement can vary. In some cases, when a customer experiences fraud while using a service provided by a tech company, the responsibilty for reimbursement may fll on that company, especially i the fraud is linked to a specific product or feature they offer. However, when a customer's bank account is compromised, the responsibility typically lies with the bank to investigate and rectify the situation in some circumstances. Banks have established protocols and legal obligations to handle such situations, hitps:/wwwkeystonelaw.comkeynotesireimbursing-reud-victims-how-has-big-ech-financia-sorices-shited the-esponsibiiy-to-bankstt~text=Bank... 1378/24, 617 PM. Reimbursing fraud vies: how has big tech financial services shifted the responsibilty to banks? : Keystone Law ‘On 2 July 2023, the Supreme Court handed dowm its decision in Fiona Philigg v Barclays Bank UK Plc. In ‘what isa blow to consumers and a relief for banks, the Supreme Court has ruled in favour of Barclays, meaning victims of authorised push payment (APP) fraud cannot call on a long-established duty of care known as the ‘Quincecare’ duty to seek reimbursement of funds from their bank or other payment service provider (PSP). Banks and PSPs will void the wave of APP fraud related litigation they had feared, but various developments ‘outside of the courts could still provide some redress to victims of this type of fraud in the future. Read a detailed analysis of the judgment here. Whilst the Phillips judgment offers some protection to banks, banks are still subject to 2 more regulated environment than tech companies; for example, banks owe a duty to protect their customers against the acts of customers’ dishonest agents. Banks should take reasonable steps to try to recall payments once the ‘customer requests them to do so, and banks can be held liable if they are on notice of the potential scam/fraud. Tech companies are not subject to this same framework. Incases where a tech company partners with a bank for financial services (e.g through APIs or co-branded products), there may be specitic agreements regarding fraud responsibility outlined in their partnership contracts. These agreements can dictate who is responsible for reimbursement in different scenarios, How are tech companies regulated? ‘Tech companies, especially those venturing into financial services, face a different set of rules, They may not hhave started as financial institutions, and their entry into the financial sector introduces new challenges for regulators. As a result, there's ongoing debate and evol and address potential risks related to data privacy, cybersecurity, and fair competition, ig regulation to adapt to this changing landscape ‘The current review into different private-sector actors in the ‘fraud chain’ - the stages of the crime, from identifying a victim to securing victim's assets, include digital platforms, the holding institution, receiving institution and phone networks all bearing the responsibility for compensation. This would involve 3 joint approach whereby social media platforms work with telecoms, financial services ‘and government to stop fraud at the outset - not just after the criminals have struck. That can only be done by the seamless sharing of data and information between sectors, Overall, responsibility or reimbursing vietims of fraud depends on the specific circumstances, the nature of the fraud, and the contractual ‘agreements in place between the tech company and the bank, ‘The Payment Systems Regulator (PSR) confirms new requirements for banks and payment companies that will ensure more people than ever before will get their money back if they are a victim of Authorised Push Payment (APP fraud; prompting more action to prevent these frauds from happening in the first place. This significant new level of protection is a world firstin the battle against APP fraud, In October, the PSR will give the final legal instruments to Pay'UK and a further consultation on the legal instrument to be given to PSPs. /htipsziww-keystonelaw.comvkeynotes/teimbursing-traud-vctms-how-hes-bigtech-fnancial-services-shied-the-esponsibiliyo-bankst~text=Bank... 23915/24, 6:17 PM Reimbursing fraud vice: how has big tech financial services shite the responsibiity to banks? : Keystone Law By the end of 2023, the PSR will publish the claim excess and maximum level of reimbursement, additional guidance on the customer standard of caution (gross negligence) and publication of all legal instruments. Ifyou are concerned you may be a victim of fraud, please contact Louise Abbott. Share this article f Xin®@ For further information please contact: x Louise Abbott Partner 7:0203319 3700 €: Send an email This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article. https: keystonelaw.comkeynotesireimbursing sraudt-vctims-how-has-big-tec-inancial-services-shited-heesponsibilly o-bankstt~text=Bank.. 38BROWN, COLLEAGUES PRESS ZELLE TO CLARIFY POLICIES TO PROTECT CUSTOMERS FROM FRAUD AND SCAMS ‘WasiMoTOW 1. ~ Today, US. 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Fa ocho la ie lena yar pone previ: ‘Theron cae eseporsd sams th ofthis th tal della vl cancion ‘tnt mentee whee viel EBRD BROWN pre wn Wa a a ‘wc th ergo aright Ac 6. modeber aon, Zan ener opr of enn fd a cer a pa, Haw ay rpc nd as cn sn ‘casero of tot ve fl elend year? or och ya ae pve ‘Thwtaa amber of wanton para nathan by erase ng land the el dar cf hac teins, v2‘ett mic oan eZ povided ends eastamers io rperad unre resnten end ttl dl RELATED ISSUES eonamekibe? Paci evceand Haasog > evo 22FEBRUARY 2008 BROWN: SCAMMERS HAVE RAMPED UP EFFORTS WHILE BANKS AND PAYMENT APPS STAND BY ‘WASKINGTON.D¢~ To US Sastoe Shared Brow (D-CH Caiman fhe Senta Corte cnBesking. Hong and Oba rn ivr th leg opening sata ot tdesheaing ened “ening Sone Pein the Banko Stren Ts pac, ‘Sex Bron er apr dey fe ‘When conus sinter svgh an app snd shack in th ma hau oppsed tb le tt ancl corp are ‘cto ther one an lap them Fnmhng gos wes ‘esac teas Seamners an sar erred thr rt ttle pra mone. 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Sh il wonders ont wt she os hve dane rey. But oo hl aro think abt ht gsi, ‘Adobe lath tones hn type of ora to wn plete apse opt millon of cesumeirgh eso: eile oancal uct coun ‘rere atari at. Te bot ao wor rE oo ams onthe sgn, Peoples ‘behlatoheean crt a ann tle wen thy hae epson ‘People oe i anes payee peal banks dav p ong atin ae a pk usta, ar enanp song th pe: par compan, Cath prin at 6 pre watorin sation in 200, ‘ae cis ania anna wo have bn itinerant heb athe ne tegen “shat the aac oo ay neat your money ek’ nr nh ale waa echro tee apet ems They eet cary tha reinbaaamt pay. ‘hea compan need to tp. rapa need sts mle in Ths ack Pt spy ad fal eves coumpeses ave shown thay dle oy, enitagnest ‘he Cou: Pane etnies sabe eoposee ‘lsh Ag al fiw he coat pete nen 8 eto ete wel nlp ete ater Veen, ‘Tina what he CEPR dou prota thal ean ney. When ha CED econ ie _sptemeck conse not corporain, ith sntions fuer 8 nyse ta hs compan o mero pot ensamer Weng ‘ect swe semfarovout bari fund wean ulgue n evvuner ce hay ae xine oil png tio Sri saith png rear ass srs meypocaceny lneppeendehack iad "hep we can ce mea shout oma pares gpa ee nal ri compere capo te enue and RELATED ISSUES ‘swe anda»‘Atlomey General James Sues Citbank for Faling to Protect and Relmburse Viet of Electronic Fraud Letitia James New York State Attomey General Attorney General James Sues Citibank for Failing to Protect and Reimburse Victims of Electronic Fraud Citi Maintains Poor Security and Anti-Fraud Protocols, Leading to Millions of Dollars in Losses for New York Account Holders January 30, 2024 NEW YORK - New York Attorney General Letitia james today sued Citibank, N.A. (Citi) for failing to protect ‘ond refusing to reimburse victims of fraud, The lawsuit alleges that Citi does not implement strong online Protections to stop unauthorized account takeovers, misleads account holders about their rights after their accounts are hacked and funds are stolen, and illegally denies reimbursement to victims of fraud. The Office of the Attorney General (OAG) has found that the bank fails to respond to fraudulent activity oppropriately and quickly. As a result of Cit’s lax security, New York customers have lost millions of dollars, and in some instances, their entire lifesavings, to scammers and hackers, Attorney General james is ‘seeking to hold Cifi accountabie for failing to protect its customers and require the company to pay back defrauded New Yorkers with interest, pay penaifies, and adopt enhanced anti-fraud defenses to prevent scammers from stealing consumers’ funds. “Banks are supposed to be the safest place to keep money, yet Citi’s negligence has allowed scammers to steal millions of dollars from hardworking people,” said Attorney General James. “Many New Yorkers rely ‘on online banking to pay bills or save for big milestones, and if'@ bank cannot secure its customers’ accounts, they are failing in their most basic duty. There is no excuse for Citi's failure to protect and prevent millions of dollars from being stolen from customers’ accounts and my office will not write offillegal behavior from big banks.” Harm to New York Customers Citiis one of the largest banks in the United States and maintains checking and savings accounts for millions of consumers nationwide, including through online and mobile banking. The lawsuit alleges that scar 'MP We Value Your Privacy Pro’ We use cookies to enhance your browsing experience, serve personalized content, and analyze frat our traffic. By using this website you consent to our.use of cookies. chit ne Okay tpsu/ag. my golpress-rleass2024atiomey general jamee-eues-iibenk fllng-protect-and.reimburse-ctmst~text=Atiomey Genera James is se... 132p, 812M ‘Atlomey General James Sues Citbank for Failing to Protect and Reimburee Vcime of Electron Fraud One New Yorker had $40,000 stolen from her retirement savings account. In October 2021, the customer received a text message that appeared to be from Citi instructing her to log onto a website of call her local branch. The customer clicked the link in the message but did not provide additional information as requested in the text message. Afterwards, the customer called her local branch to report the suspicious activity but was told not to worry about It. Three days later, the customer discovered that a scammer changed her banking password, enrolled in online wire transfers, transferred $70,000 from her savings to her checking account, and then electronically executed'a $40,000 wire transfer, none of which was Consistent with her past account activity. For weeks, the customer continued to contact the bank and submit affidavits, but in the end, she was told thatt her claim for fraud was denied. Another New Yorker had $35,000 stolen from her account. She was reviewing her online account and found ‘message that her account had been suspended and was instructed to calll a phone number. She called the number provided and a scammer told her that he would send her Citi codes to verify recent suspicious activity. The scammer then transferred all of the money in the customer's three savings accounts into her checking account, changed her online passwords, and attempted a $35,000 wire transfer. Citi attempted to verify the wire transfer by calling the customer, but she was working and did not see the call at the time. Less than an hour later, the scammer attempted another $35,000 wire transfer, which Citi approved without ever having made direct contact with the customer. She lost nearly everything she had saved, and Giti refused to reimburse her. Insufficient Online Banking Security ‘The OAG found that Citi systems do not respond effectively 10 red flags, such as scommers who are using unrecognized devices, are accessing accounts from new locations, or are changing banking passwords or usernames. Additionally, Citi systems do not flag and stop efforts to transfer funds from multiple accounts into a single account ond then send tens of thousands of dollars out the door in minutes. Citi iso does not outomatically initiate investigations or report fraudulent activity to police orlaw enforcement authorities when consumers first report it to Citi, 'n addition, Cit falls to appropriately respond to notifications of fraud by its customers. When victims Contact the bank fo report fraud, Citi leaves them on lengthy telephone holds, allowing scammers to continue their fraud. Additionally, Citi does not implement sufficient measures to protect consumers from future unauthorized transactions until they visita local branch. Citi representatives falsely told consumers ‘that thelr accounts were secure and often promised that their money would be returned, although the bank did not take immediate steps to recover stolen funds. Citi also falsely tells consumers that they need ‘to visit local branches and execute special affidavits detalling the scams that led to their losses — information Cifi then used to blame consumers and deny their claims, Atte 1 thre We Value Your Privacy ' (EF Weuse cookies to enhance your browsing experience, serve personalized content, andanalyze Companies Bank f America Corp Fallow Copital One Financial Corp Fallow JPMorgan Chase & Co Follow Shawmare compares tpsulwarw reuters. comfechnology/eybersecurly/payments-app-zelle-begins-rfunds-imposter-scams-after-washington-pressure-2023-11-13/ wn3/12/24, 413 PM Payments app Zelle bopins refunds for imposter scams after Washington pressure | Reuters Nov Reuter) - Banks on the paymen: app Zell ave begut rend vis of poste scams ares conser petecton ons sy. lawmakers an he eal ‘conser watches, mame polly ang. ‘Te2100 tna es on Zl, a peepee wn by seven banks ung Pagan hase IPM MC ane Banko Ames GAN), began even raers aF ete 30 for custome’ pein sending mene to careers cing tobe om a goverment agency, bark testing tie rove, sd Ey Waring Sec EWS he bas company that onns Zt ‘That's wel aor easing legal an equator rues Ben Chance, chi aud is cers EWS, ld Rests. 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A Mach 2022 New York Tes rear ttc Aounehing en Ze caught the tenon of aumaters Fagen eta fig Bek, nus Sento EEabeh Waren, ‘Sean other erates states an ewerigatnetimating that Ze ers hada $40 millon ol ype of aul 202 alone. rng a Senate ening ast year Waren tld [imonarsether bak CEOs at neyo rated at ean” er cin buthad rt sto ha uta Moethan WO mien poole ll wh US. ark coats, pase seen fo Ze, szaang EUS, Imprsonater tau asthe mastered scala 2022 acs payment matheds nthe US, 2ceurting lr $26 illo Inns acoeing tothe Feral Trae aris, ‘nips: reuters.comitechnologylcybersecurty/payments-epp-zelle-begins-refunds-imposter-scams-afer-washinglon-pressure-2023-11-13/ ane312024, 413. PM, Payments app Zelle begins refunds for imposter scams ater Washington pressure | Reuters Bark wor het cong th cost athe anaconslecorae rod and pt the nthe hon or eel ian liane of ring lender ‘rémburse carta EWS has implemented aimecan hat lows tanks to caw bak unde em the recent aca a ene e esr eden, Lenders alle ars no requte open th flag arf with kas, ocr 3s pment oan acount tat as er asa en he Zeenat, ‘sat Chance Hes Zl sen"s sep change econ Fa a sc aes ths Yet bt deine a prove dete “Wehovehodsteng sett conto sine helmet net ad a pt of cur urey we have continue o ene tes contol. toe pace th nha ee ger coninthemanetpacahe ‘Chance sis EWS hasbeen engaging with plemkern the ee fora “lt appre to cemosig sam dung erect fernoe dedi lw ferent ‘ne presi om Maren sri theres the Censimer Franca Poet Buea CFP) conser cmpling lend’ embure ca a Zt changes a9 [ACFP8 spckspeson dined io cmmentan Ze or eter le hangs, bus the agency wring to rts cst nling by ening tht hand nutes one wna utr isestgatin ard erorvescutan olgtns. {Poors nko Ameria ae Zl re other me banks ded comment ‘Ral’ pation charges ar lng evar” ss Waren ina sane to Revtos. "The CHP standing wthcensune's, ange te acy ep the pressure on Zl ott conser tama airs MARCET PRESSURE Zale has long argued ts aut and ame eon "processed $629lllon worth of payments n 2022 acorn othe nator with 98.9% fonts ade wit fraud or scam rer "competes wth ter peepee semen laos ke PoPal(EYPLOC an Varma ht eve ssn ce case ard hee apache otecton pogrom ere "ntacton ha coves seams, Epes ote tht ti ca compare aud andzam rates acon ptrms bese sation oy ale’ tr sons om banks eft comet pressure lap up thea ar car sai Tac apse, a kag cor ot Datos nis, 58 rowatlns mandingo rau protections Hobe beter or cst ince nde poles may unl they may ot lth 3s rom aka ‘Sonche-ams senor aterey athe at rl Conner La Ces “Teen shing that thnkisprolenst that he const eay wuld’ noha ne have that option, rt they doko; ni te banks emu them, hae ve Pre remo" sa, pote ele’ pay change wes reverts 3 "Gos tt step, Poy tusienpeted come us pan whe nk CEOs beatin he Senate next rom, cans ty exper. Tite ey bale thy hae = oon te “Thebans trou Ze without regulation, tha eglation have asl peacony gone an we Sing emake ae tha aera toate ay no ‘ensures or hams Joho, CEO of he Cosine Barer Assation, | Teeter omy aretng nestor powder athe news you redo ste your day San ae, Fesour bya ana asi taro by Cs ete oo Eig by lene see it ‘Ow Sante: Te Thomson Reuter rast Peinclesc3 Purchase lensing Rights /ntpaufwe.reuters.comechnologycybersecurty/payments-app-zelle-begins-refunds-imposter-scame-afler-washington-pressure-2029-11-19) ana3224, 413M Payments app Zelle begins refunds for imposter scams after Weshington pressure | Reuters Read Next Tetrtsy -Aaple retin ight to defend AppStore nun Bish banks en more tine te cck payment for scams wats Eur zone ans shoul conser using pM to a, ays ECR sro Mure tee oko wont fc cas-ation cans i overcharged dives ing pandemic essemure LSEG Workspace The next-generation human interface for financial professionals. tps www reuters.comtechnelogyleybersecurty/payments-app-zele-begins-refunds-imposter-scams-afler-washingtor-pressure-2023-11-13) ane32124, 4:13 PM ‘Now York sues Cithank for alleged fallure to reimburse fraud victims BREAKING Dow jum R Pops 1% (or new closing high as Nvidia we © warchawe New York sues Citibank for alleged failure to reimburse fraud victims Sarneisade Oy mene KEY POINTS New York Attorney General Letitia James sued Citibank for allegedly failing to protect and reimburse victims of electronic fraud. The attorney general's office said the alleged failure cost victims millions of dollars. In a statement, Citi said the bank “works extremely hard” to prevent threats and assist customers who become victims of fraud. In this article concn © ‘nipsitwwwenbe.com2024/01/S0inew-york-sues-clbank for-alleged-falure-o-reimburse-faud-vctims.Nml uafraud victims 3224, 4:13 PM [New York sues Citbank fo alleged failure to reimbu pops new closing high as % © wascuave New York Attorney General Letitia James on Tuesday sued Citibank —forallegedly failing to protect and reimburse victims of electronic fraud. ‘The suit claims that Citi does not have strong protections in place to prevent unauthorized account takeovers, misleads victims of fraud and illegally denies reimbursements, according to a release. The attorney general's office said the alleged failure on Citi’s part has cost New York account holders millions of dollars, and in some cases, their entire life savings. “Banks are supposed to be the safest place to keep money, yet Citi's negligence has allowed scammers to steal millions of dollars from hardworking people,” James said in a statement. “Many New Yorkers rely on online banking to pay bills or save for big milestones, and if'a bank cannot secure its customers’ accounts, they are failing in their most basic duty.” Citigroup, the parent company of Citibank, has struggled with risk management and controls in the past. Former executives have said the bank — the product of decades of mergers that created a patchwork of technology systems— underinvested in ts infrastructure. That was evident when Citigroup accidentally sent almost $900 million to Revlon’s lenders in 2020. Later that year, banking regulators fined Citigroup $400 million and ordered the firm to improve its risk management systems. Since taking over in 2021, CEO Jane Fraser has pushed to improve the bank’s technology and appease regulators. ‘The New York lawsuit includes specific people who had thousands of dollars stolen from their accounts and said the bank did not reimburse them. Ina statement, Citi said the bank “works extremely hard” to prevent threats and assist customers who become victims of fraud. “Banks are not required to make customers whole when those customers follow criminals’ instructions and banks can see no indication the customers are being deceived. However, given the industry-wide surge in wire fraud during the last several years, we've taken proactive steps to safeguard our clients’ accounts with leading security protocols, intuitive fraud prevention tools, clear insights about the latest scams, and driving client awareness and education,” the company said in a statement. “Our actions have reduced client wire fraud losses significantly, and we remain committed to investing in fraud prevention measures to help our clients secure their accounts against emerging threats.” James alleged in the lawsuit that Citi must reimburse victims of fraud under the Electronic Fund Transfer Act. Don't miss these stories from CNBC PRO: a https:ltwwwenbeconv2024/0130/new-york-suee-citbank-for-alleged-fallure-to-teimburse-traud-victims.html 24311224, 4:13PM Utah family says thor bank refuses to reimburse fraudulent charges. On the Site: Exhausted: Utah's Air Quality Famp02 KSL.con [cetie | [[estgates ] [Shows] [_ weater ] [Poses] tocal_] [National] [Menu % GET GEPHAROT Utah family says their bank refuses to reimburse fraudulent charges Feb 26, 2024, 10:12 PM | Updated: Feb 27, 2024, 5:43 am © KSLSTV Live BY MATT GEPHARDT AND SLOAN | share o* ‘SCHRAGE KSLTVcom TAYLORSVILLE ~ A Taylorsville family says 2 hacker drained thousands of dollars out of their bank accounts and left them overdrawn by tens of thousands more. They thought federal banking rules protected them, but they say their bank has refused to reimburse them for those losses. nipskslt.conv62587.4/utah-family-says-thelr-bank-refuses-to-elmburse-raudulent-charges! ano3/12/28, 4:13PM, Utah family says their hank refuses to reimburse fraudulent charges Utah family says their bank refuses to reimburse fraudulent charges Froebone Twit sean ‘Aaam says ne notmtied nis bank of the x Close alt suspicious activity, but it continued: $5,000 in, $5,000 back out ~ over and over again until the transactions became just $5,000 out. “Just straight withdrawals ~ one after the other” Drea said. Their contact info had been changed so the Richardsons didn't see any emails, texts, or notifications of any kind. "Didn't see it happening until my card...they... they stopped transactions on my checking account,” Adam said. By that time, a total of $60,000 had been transferred out, leaving their account overdrawn by over $53,000. The Richardsons tps. coml625874/utah-farily-says-tek-bank-refuses-to-eimburse-fraudulent-charges! Mike Headrick, KSL. Investigative Reporter Matt Gephardt, KSL Investigative Reporter Daniella Rivera, KSL Investigative Reporter Sloan Schrage, Consumer Investigative Producer Annie Knox, KSL Investigative Producer Cimaron Neugebauer, KSL Investigative Producer 2108112124, 4:13 PM Utah family says thee bank refuses to reimburse fraudulent charges Utah family says their bank refuses to reimburse x Close fraudulent charges a EF: « Ena sey authorized. “They said, ‘Nope, there's no fraudulent activity.” said Drea. “This was all done through your profile and because it was done through your personal profile, you're responsible for this” Now, Drea and Adam say they're on the hook for that overdrawn $53,000. “| got a letter from the bank saying that they will be pursuing with collections,” said Drea, who added the bank abruptly closed all their accounts. Not taking that as the final answer, the Richardsons contacted me. “To allow this many transactions to go through and approve transaction after transaction and then to turn around and say, ‘Oh no - there's no fraudulent charge!” Now, if a bank won't refund stolen money, it could be violating Regulation E. That's a federal rule in the Electronic Fund Transfer Act saying with unauthorized transactions, banks have an obligation to restore funds. So, the KSL Investigators reached out to the Richardsons’ bank, USAA, to ask why they're hitps:iikstv.comi6258741utah-ariys 1eir-bank-refuses-toreimburse-traudulent-charges! 3it09712/26, 413 PM Utah family says their bank refuses to reimburse fraudulent charges Utah family says their bank refuses to reimburse x Close fraudulent charges Fete wer Utes nal siny The Richardsons, however, got more news. They told us after we contacted USAA, the bank credited the fraudulent transactions and is restoring the money they had in their accounts. The Richardsons still don’t know how someone got access to their accounts, though they insist no one tricked them into sharing their account info. Even if they had, the Consumer Financial Protection Bureau says when someone is fraudulently induced into sharing their account access info, that transfer is still unauthorized under Regulation E. Share https: kstv.com/625874/utah-family-says-thelr-bank-refuses-toeimburse-fraudulent-charges! ano‘It's a crime. It was fraud’: Woman is out $10,000 after Chase Bank refuses to investigate check scam ‘Aes wow s ut $1000 af Seid Case Bank reste ar S100 ening stolen amma ard changed. By Coin Stanton Gry Harper and Gray News salt Published Jan. 1, 20280 1PM EST ouxon MESA Avi TWICES Gray News} — A woman In zona was the lin of ey sophlsaed eheck-cshng scam. Shemale a 514600 check toa rate ou of tar. Srnene tle and cashed, nd nw her bank tld both he report andthe caster 3 "eehicaly" prevent the from oven. ‘ate Duster sid she waited morths for Chase Bank to investigate $16,000 check hat she male out of sete a check tht wa ston 5 Dut eid he jut found out Chae Banc dit inertia ah “Chase Barks ding nothing” she si. “And they teling me hat its because! missed the deae: ‘nasrevious 0. You Sie epot Due explaned haw sh mada chck oan dey late in Chleago. wae a check that herent never aceved ‘When te lgged one to her bank acount ose hat happens she eccured tha ppsrenty the cack had Been nce by x eames anit was aeed by removing er eli are and wring “Unprecedetes Ente intd inthe py 0 ord ute reacte the (ad o Chast Ban whieh gus customers ua toa yatta report atered” checks, ut Chace dts nt are” 14‘Chace tol Durer the check wat count, net sere andthe dace fr repering » ourtertetcheck had ake pssed ‘Ata lanes the chek look the sme Sut on 8 dos oc, heey to the ede nes ferent Sis the sec inf on he sie mean, ifs he, wow, youre gonna eld ha against me” ute si Adit gets wore The scammer cashed the forged chick 2D Bank ond Chas read Dt for months that they were waking for 7 “Eeury month forte months Ie Ben geting 2 eter satin ha hey sl hives hears back rom D Sark she sd ‘ut Chae acted it never actualy contd T Ban and now sys thos eters wee autora generted, So Dur is et $1000, en the thet wont ven be “Wa crim. twas aud she std “An Chas has cone nothing” ‘The check as forge tos "Unprecedented Eas” But On Your Side was unable to pn own 2 physical lation or any information abou tt compary Copyright 2024 KTVERPEHO vi Gray Media Group In Al ight reserved (io Launches New Rule for Cars Used Lass Than $0 Misidey Linn ay ee el Dont Pay $178Year or Amazon Pine -Use This Trek Instead ‘The singe can sae tne money on Ana, bits Pre mens ang Look For Any High School Yearbook, I's Fro Locate Almost Anyone By Entaring Tele Name (This Is Adltingt) Find ead Puke Rese oman aut Saeone Sawn Rec ly, Seach Ay Nae stn she ==) button Laughs At Poot Farin Restaurant, Then Weltress Hands Him An Unbelievable Note On The Bil ‘Mopic Dermatitis Is Silent But Deadly -Knov the Signs ‘eleDematts Spe (ume ey We They San Thom Saree) Most Read 3 chilran ad 2 aus kl Inctash involving school bus. pole say. 24‘112124, 4:14 PML ‘Man ripped off in check-washing; bank seemed fo blame victim - CBS Chicago CHICAGO News Weather Sports Video 60" Man ripped off for thousands in check-washing scam; bank's response seemed to blame victim CHICAGO (CBS) - We cover many stories involving scams, but this one has a new twist we have not seen before. ‘ped him off for thousands. But it was the bank's f - a“ Be the first to know pe blamed the victim, Get browser notifications for breaking news, live events, and exclusive reporting lens at Devon and Cicero avenues. He is also an alem. pes where they steal the whole box.” httpsuww.cbsnews com/chicagoinews/mar-ripped-off-check-washing-bank-blame-vctiy 16ana, 414 PM Man ripped off in check-washing; bank seemed to biame victim - CBS Chicago Spyropnylgsis right - we have reported time and time again on thefts involving those official blue United States Postal Service mailboxes. ‘What's new in this case is several of Spyropoulos' checks were stolen. Fraudsters took his checks and changed the pay-to line and amount - so the bad guys got the money - and lots of it. Several banks made sure Spyropoulos didn't lose a dime. But one bank, Chase, refused to give him $7,500 back - after he says scammers altered a check originally written for $200 to someone who helped him clean. "You go to your bank, and you trust your money," Spyropoulos said. Then, he got a letter from chase with this curious wording: "We are denying your claim because during our review, we found that you did not take t he appropriate steps to protect your account from theft or unauthorized use. We will not reimburse your account.” “That's a phony claim. What else can I do?" Spyropoulos said. "Ask them. What else can I do to protect my account?" ‘Spyropoulos now has an employee help him pay some bills electronically. For other bills, Spyropoulos says he walks down the street and hand-delivers checks. He does not use blue mailboxes anymore. Spyropoulos: "They're not going to take $7,500 away from me - when T'm working 18 hours a day, and let them have $7,500 - refusing to pay for their mistake.” Victory: "All of this seems pretty insulting.” Spyropoulos: "Its. Iti.” More than a year after the check was mailed, Spyropoulos finally got his money back. As to what happened, the short answer was bank error. °Mr. Spyropoulos' claim was originally denied because we believed he was enrolled in a check protection service called Positive Pay, which requires a customer to confirm check numbers and dollar amounts,” 2 spokesman said in a statement. "We have since reviewed the case further and resolved the claim to his satisfaction.” jercial accounts - and the bank places responsibility a Be the first to know Get browser notifications for breaking news, Ive coer ded etnies reporting CBS 2 inquired, that the bank "reviewed the case sf check fraud last year - nearly double the figure for ————— —— - a hps:imaew.cbsnews,com/chicaga/news/man-tipped-oft-check-washing-bank-blame-vilimd 26312726, 4:14 PM Men ripped offi check washing; bank seomed to blame victim - CBS Chicago Hatallangssible, you should avoid mailing checks. Chase also provided us with other tips to help you avoid becoming a victim: Customers should always be careful when using checks. The checks you write can include your name, address and bank account number, which can leave you vulnerable to fraud if they fall into the wrong hands. If you need to write a check, remember some key tips: + Write your check using permanent ink. + Make sure to use the whole line or draw a line to the end when writing the payee's name on the check where you write who the check is payable to, so no one can add an additional name or another additional information. + Write out the amount in words and then numbers using the entire line at the end. Make sure that the words and numbers match the written amount. For example, One hundred dollars, $100.00. + Sign your checks the same way every time. Also think if there are other ways to make the payment: + Avoid writing a check out to "cash" + When mailing a check, use only monitored and safe drop off places or consider sending from your local post office or use a delivery method that tracks/traces the item. + Ask ifthey accept other payment methods like electronic payments or Zelle and make sure you know who you are sending money to. + Use bill pay services your bank provides Think about how you mange checks you are depositing: + Don't sign the back of a check (endorse) you are presenting for deposit or cashing at a later time + Make sure you sign your check that you deposit with your mobile device "For mobile deposit only" A few other tips that can also help you: + Make sure you order your checks from a reliable source, such as directly with your bank, and verify the Oe eect tee ded ved. urrent address before mailing the check to them. a Be the first to know j Get browser notifications for breaking news, ive ‘events, and endusive reporting ice and don't leave it out in public. 5. bitps:www.cbsnews.comfchicagolnewsiman-ripped-of-check-washing-bank-blame-vicim/3112124, 414 PM Fraud viclims demand Chase Bank do mare after thousands drained from accounts wens JL& CONG “Worse | Quick inks... . NEWS > METRO DETROIT NEWS > THE 7 INVESTIGATORS Ox. Fraud victims demand Chase Bank do more after thousands of dollars drained from accounts ‘That’s our hard-earned money that we worked for and it’s all gone’ ‘Sever! local people say they've lost ens of thousands of lars thanks to fraud on thek-bark accounts, And thy'@ not alone, Posted ot 444 PM, Feb 28, 2023 ond lat updated 749 PM, Fob 28, 2023 (WXYZ) — Several local people say they've lost tens of thousands of dollars thanks to fraud on their bank accounts. And they're not alone. Across the country, scams are on the rise. But unlike credit card fraud where you can usually get your money refunded, these families say they're furious that their bank won't help them get their money back. https:twrw.uyz.comnews/local-newsinvestigationsiraud-victims-demand-chase-bank-do-more-afterthousands-f-dollas-drained-fom-accounts 4/419/12/24, 4:14 PM Fraud victims demand Chase Bank do more after thousands drained from accounts Chase bank is calling this a “societal problem” and saying these customers either did not do enough to secure their accounts or they authorized these wire transfers. But some of these local families say that’s just not true, and say they think their bank should do more to protect them. + Ifyou have experienced wire fraud or other forms of financial fraud, there are several agencies that suggest filing complaints: FBI: https: /www.ic3.gov/ © Consumer Fraud Protection Bureau: hitps: //www.consumerfinance.gov/complaint/, “[t's just very frustrating that they don't care,” said Amber. “I've been very, very upset for a year, to the point where sometimes I think I might be having a heart attack,” said Bill Brown Jr. hitps:heww. wna. comnewsllocaLnews/nvestigations/rauc.vietims-demand-chase-bank-do-more-after-thousands-o-dolars-crained-rom-accounts 2/11112124, 4:14 PM Fraud victims demand Chase Bank do more after thousands drained from accounts “I've been very, very upset for a year to a iarem eedial MU alTccMey inode al tsa might be having a heart attack.” BILL BROWN BANK FRAUD VICTIM “There's nobody on your side. There's nobody to help you,” said Anne Gongos. Amber, Bill and Anne all say they lost huge chunks of their savings to scammers, and then they were shocked to learn their bank would not help them get their money back. “It’s hurtful, that’s our hard-earned money that we worked for~ and it's all gone,” Amber told 7 Investigator Heather Catallo. http: ww.wnnyz.cominewsllocal news/investigations/raud-victms-derand-chase-bank-do-more-aterthousands-of-dollars-drained-from-accounts 3/1!32724, 4:14 PM Fraud vietims demand Chase Bank do more after thousands drained from accounts “It’s hurtful. That’s our hard-earned money that we worked for and it’s all gone.” AMBER EAN aaa ced Amber says she had just left the Chase Bank branch in St. Clair Shores in January when she got a text on her phone that looks like it’s from Chase. The text alerted her to “fraud” on her account. “[ immediately called Chase and I was going through the prompts. And when I was going through those prompts, I received a phone call from Chase,” said Amber. “They knew my name, my accounts, they knew the balances, they knew everything. And they said to secure the account, we have to move your money.” But Amber quickly learned, she had been on the phone with a scammer who tricked her into making a wire transfer to what she thought was a new secure account. And now she’s missing $17,500. Within moments of the call, Amber rushed back to the bank to try to stop the wire transfers that were still pending. “But he said it's not on us to be able to stop it, which I find weird that the bankers can't stop these transactions,” said Amber. tps:linew.unyz.comMnews/local-newsinvestigations/raud-victmns-demand-chase-bank-do-more-fler-thousands-ofdollars-drained-rom-accounts 4/119/12/24, 414 PM Fraud victims demand Chase Bank do more after thousands drained from accounts Amber has no idea how the caller had so much of her account information already, but what she does know is that her money is gone. So is her trust in her bank. “IT'S JUST VERY FRUSTRATING THAT THEY DON'T CARE, AND THEY JUST LET THESE PEOPLE GET AWAY WITH IT AND THEY BLAME YOU FORIT.” AMBER BANK FRAUD VICTIM “It's just very frustrating that they don't care and they just let these people get away with it and they blame you for it,” said Amber. Amber isn’t alone. The spoofed Chase phone number scam appears to be costing customers tens of thousands of dollars in cities across the country. ‘And that’s not the only fraud that Chase customers say they're facing. “L couldn't breathe,” said Anne Gongos. Anne says she noticed more than $31,000 missing from her savings account back in 2021. hitps:/w.wxy2.comnewslocel-news/nvestigaionstraud-victims-demand-chase-bank-do-nore-ofter-thousands-of-dolarsdrainedfrom-accounts Ifsya, 4:14PM Fraud vic demand Chase Bank de mor ater thousands dined fom accounts This mom from Oakland Township says she never authorized the wire transfers that were made to purchase cryptocurrency. “Who has income that they can just have stolen from them, right out of their account?” ANNE GONGOS TN ae RU Coat UE “Who has income that they can just have stolen from them, right out of their account,” said Anne. Anne says she’s been battling with Chase ever since. She says they did return some of the money but she’s still missing $7,000. “It's so frustrating to me that they said I made this transaction, and I didn't,” said Anne. “T'mata loss. I need help,” said Bill Brown Jr. Bill says last February he noticed $35,000 had been wired out of his Chase Home Equity Line of Credit account. A few days earlier he says he got an odd phone call about his computer being hacked but says he does not think he gave the caller any personal information. htpsimww.vxyz.comnews/local-newsinvestigationsiraud victims demand-chase-bank-do-more-sfter-thousands-of-dolars-drained-trom-accounts ittavtares 414 Pm Fraud visims demand Chase Bank do more afer housands dined rom accounts Brown says he visited his Chase branch in Grosse Pointe Farms and reported the fraud immediately, only to later learn Chase would not be refunding his money either. “They decided I did not take the appropriate action or steps to protect my computer or information. Now, I don't know what other steps anyone could take to protect their information,” said Bill. Brown’s family is furious. “What do they rely on to release these transactions? Who did they send them to, and did they do anything to try and reverse them or stop them,” said Bill Brown ITT. “And you don't have answers to those questions,” asked Catallo. “They won't talk to us,” he said. “It's a lot of money for someone his age to be losing,” said Grosse Pointe Woods Police Detective Miles Adams. Det. Adams tried to help get Brown’s money bank but says once it's transferred out of an account ~ that's nearly isstpossible. The only thing police and the banks can really do is cautiost'customers to protect their accounts as best you can. hitpeuwwxye-com/newslocal-news/investigaionsraud-victms-demand-chase-bank-do-more-afterhousands-of-dllas-drained-rom-accounts 7H3r224, 4:14 PM. Fraud victims demand Chase Bank do more after thousands drained from accounts “It's hard to determine if it's a scam or not. With phone spoofing, my advice is to do all things in-person if you can.” Daa ey GROSSE POINTE WOODS POLICE “It's hard to determine if it's a scam or not with phone spoofing. My advice is to do all things in- person if you can,” said Det. Adams. Chase Bank Vice President of Regional Communications Stephanie Gostomski would not comment on the specifics of these cases on the record, but did offer this advice: “Scams are a societal problem. Scammers impersonate companies, banks and even government agencies to try to trick consumers out of their hard-earned money. We urge all consumers to ignore phone or internet requests for money or access to their computer or bank accounts. Legitimate companies won't make these requests, but scammers will.” Here are some additional tips from Chase: https: wre. comMnews/ocal-newslinvestigationlrau-victime-demand-chase-bank-do-more-alerthousands-of-dolars-crained-rom-accounts 8/113712124, 4:14 PM Fraud vietms demand Chase Bank do more after thousands drained from accounts SCAM PREVENTION TIPS ee mys ou eam a el eae Ly INFORMATION, PASSWORDS AND ONE-TIME PASSCODES. Bh aie neo aea eee eT UE Wena lel ACCESS TO YOUR PHONE OR COMPUTER. SULA Ma | (koe Ake) Te Dae Bol Con Loy Te amon Cell ke ee ae aele a aT RATED Laon hole RRO MLS REPRESENTATIVE OF THE COMPANY THAT CONTACTED, CALL THE DW tema eel cacen vee F YOU WANT 70 BE SURE YOU ARE TALKING TO A LEGITIMATE fae UN) Qe eR eee Bt Toko ALE ALL eee SCAM PREVENTION TIP! + Consumers should protect their personal account information, passwords and one-time passcodes. + Banks will never call, text or email asking for you to send money to yourself or anyone else to prevent fraud. + Ifyou want to be sure you're talking to a legitimate representative of the company that contacted you, call the number on their official website. + Tolearn more about common scams and ways to protect yourself visit: www.chase.com y-tips {(namo4.safelinks. protection.outlook.com] + Never click on suspicious links or grant anyone remote access to your phone or computer + Ifyou want to be sure you are talking to a legitimate representative of your bank call the number at the back of your card or visit a branch ‘The 7 Investigators reached out to the U.S. Treasury Department's Office of the Currency Comptroller which oversees banks like Chase: hitps:sAww.wxyz.comnewslocal-newesinvestigations/raud-wictims demand:-chase-bank-do-more-afterhousands-of-dolars-drained-rom-accounts ttsas, 414 PM Fraud vitms demand Chase Bark do more afte thousands drained trom accounts “The OCC regulates national banks and federal savings associations. The information below pertains to OCC-regulated institutions only. It does not apply to state-regulated banks or credit unions. Other federal banking agencies may have similar procedures for consumers to submit complaints regarding banks regulated by those agencies. The OCC encourages consumers to contact the OCC’s Customer Assistance Group to file a complaint against a national bank or federal savings association. Consumers may reach the Customer Assistance Group at 1-800-613-6743. Information on how to file a complaint online, by mail or by fax is available at www.helpwithmybank.gov [helpwithmybank.gov]. There’s also information on what consumers can expect after filing a complaint. The website also has a section with information on fraud and scams, in addition to other topics, that may be helpful: https: //helpwithmybank.gov/help-topics/ fraud-scams/index-fraud-and-scams.htm] (helpwithmybank.gov).” The U.S. Secret Service also investigates financial crimes. A spokeswoman told us: “We recommend that individuals report financial crimes to their local Secret Service field office: https: //www.secretservice.gov/contact /field-offices [secretservice.gov]” Cemoh 2023 Sips ed nz Aah resend. The mal may rt eve bronco ree, read Sign up for the Morning Newsletter and receive up to date information, e f | E-mail Contact the 7 Investigators ‘s Contact the 7 Investigators ‘Call the 7 Investigators Tip Line News Weather Devolt Trafic Sports Entertainment Marketplace 6@ox Don't Waste Your Money Support 57 Scripps Local Medla SUB 52024 Surpps Medi, ne Give Light ond the People Wit Find Their Sitemap Privacy Policy Privacy Center Journalism Ethics Guidelines Own Woy Terms of Use EEO Careers FCC Public Fie FCC Application Public File Contact. Accessiblity Statement Scripps Media Trust Center Closed Captioning Contact hitps:w. wy. comMnews/local-news/nvestigations/raud-victins-demand-chase-bank-do-more-aterthousands-ot-dolars-eined-fom-accounts 10/113712024, 414 PM Jesse Jones: Victim cals Jesse after bank refuses to reverse $1,200 fraud charg ~ KIRO 7 News Seattle NEWS DEALS. é | Flood JESSE JONES: Jesse Jones: Victim calls Jesse after bank refuses to reverse $1,200 fraud charge 800980 ent February 02, 2023 at 4:47 pm pst « - ixeles) 7 alls Jesse afte bank refuses to reverse $1200. Live Streams Dragto Resize Video NOW PLAYING ABOVE By Jesse Jones, KIRO ‘TNews February 02, 2023 at 4:47 pm PST ‘IOE0: Viti calls Jesse after bankrefuses to reverse $1200 fraud charge hitps:iIwwwkro7.comMews/[ese-onestjesse-jones-vctim-calsjosse-after-bank-efuses-reverse-1200-fraud-chargelYJM2TGIFHIGLHBKRIPKNCA... 1/8‘32024, 4:14 PM Jesse Jones: Victim calls Jesse after bank refuses fo reverse $1,200 fraud charge ~ KIRO 7 News Seattle When Kris Blondin saw a $1,252 charge on her credit card statement, it was clear to her that she had been squared up by a scammer. “Yeah, it's pretty mind-blowing,” Blondin said, After documents showed a fake Square account charged Blondin’s credit card, Bank of America won't provide a refund. “It’s not about the money now,” Blondin said. “It's about getting justice and getting Bank of America to take care of it?” ‘SPONSORED CONTENT Cardiologist: Add This To Your Coffee To Turn On Fat Burning Mode [2 By WELLNESSGUIDE Square is a portable payment system. It’s easy. With just a swipe, the device charges your card and you're on your way. © 7 KIRO 7 obtained Blondin’s fuzzy Square receipt. It shows a fee for consultation and legal fees charged at 3:26 a.m. from a company called NW Investment Holdings in Gig Harbor. Blondin said the charge is fraud. “I get a hold of Bank of America, let them know, and they're like, okay, no worries," Blondin said. “We'll take it off your account and we'll look into it and let you know.” ‘A few weeks later, Bank of America sent her an email saying it is unable to approve her fraud claim, adding the merchant provided documentation confirming she received the merchandise or service. “Every single time | ended up trying to work with them three times, every single time, they shined me on, they shined me on,” Blondin said, “It was terrible” KIRO T's Jesse Jones wondered how Bank of America came to its decision, especially since Kris said she provided the bank with tons of proof the charge was fraudulent. hts: kiro7 comnews)jesse-jonesijesse-jones-vcti-callsesse-ater-bank-refuses-roverse-1200 fraud-charge/YJMZTGJFHIGLHBKRIPKNCA... 218712124, 4:14 PM, Check washing scam cleans out veteran's bank account| 7 On Your Side - ABCT New York Flood Waring Check washing scam cleans out veteran's bank account By Nina Pineda of Friday, October 21, 2022 @oxensee 7 On Your Side has tips on how to prevent the newest check washing scam after helping a veteran get his money back. LINDENHURST, Long Island (WABC) ~- Signing and sending checks through the U.S. mail may be the old-fashioned way to pay, but now it's the new source of a sinister scam that's costing consumers millions each year. The growing scam is called check washing - thieves steal checks out of the mail, remove the ink and then forge and cash them for big bucks. hitps:fabe7ny-comicheck-washing-veteran-scam-fraud/12356174/ 1697t2i24, 4:14 PM ‘Check washing scam cleans out veteran's bank account| 7 On Your Side - ABCT Now York Last year alone it cost consumers $815 million. So how do you foil the fraud? Nina Pineda and 7 On Your Side has tips to foil the fraud. Rudy Markard was in disbelief when a $42 check he mailed out to pay his phone bill had been. forged then cashed by someone he never heard of. ‘The amount debited his bank account was changed to $7,000. ow Get Eyewitness News delivered to your inbox daily Sign up for our daily newsletter Email Address* Name@emaildotcom Yes! I would lke to recelve the ABC7NY Top Stories - 12pm Delivery Newsletter, By creating an account, you agree to our Terms of Use and acknowledge that you have read our Privacy Policy and US State Privacy Rights Notice. Sign Up Required Fields "All of a sudden, I have a check for $7,000 that I don't know anything about," Markard said. "I just don't know how anybody could do that.” ‘The $7,000 setback hit Markard hard. The Coast Guard veteran is living on a fixed income and battling leukemia. His niece, Mary Posadas, manages his daily cancer drugs and battles his bank. She said it is just wrong how they treated her uncle. Just days after the forged check cleared, Markar made the right moves and got a police report and reported the forged check. Posadas said it looked like it had been written with crayon. hitps:fabc7ay.com/check-washing-veteran-scam-raud/12356174/3712724, 414 PM CCheck washing scam cleans out veteran's bank account| 7 On Your Side -ABCT New York "They said no problem, it'll take 7 to 10 days, no trouble," Markard said. ‘That was last spring, but a half a year later Markard said he was absolutely violated. He hasn't received any of his money back. His bank, Chase, says Capital On, the bank that cashed the check was "responsible for repayment.” "T feel like I was put on the phone with someone who just gave me the runaround," Posadas said. There are two big takeaways: never put outgoing checks in an unattended or unlocked mailbox - if you can, mail them inside your local post office. And if you use a blue postal mailbox, never mail checks after the last pickup of the day. And just a few days after 7 On Your Side’s calls to the two banks, the money was restored in full. The banks apologized and after we called started working together. Both said they were glad to resolve and refund Markar. ALSO READ | ‘Ghost cars' with fake plates racking up hundreds in RZ Pass fines https:abeTny.comicheck-washing-veteran-scam-raud/12356174!912/24, 4:14 PM. (Check washing scam cleans out veteran's bank account | 7 On Your Side - ABC7 New Yerk Ghost Cars with fake license plates ae racking up hundreds in EZ Pass bills - leaving unsuspecting car owners with bills worth hundreds. ‘Nina Pinoda has the story. SHARE YOUR STORY Do you have an issue with a company that you haven't been able to resolve? If so, 7 On Your Side wants to help you! Fill out the form below or email your questions, issues, or story ideas by filling out the form below or by emailing 70nYourSideNina@abe.com. All emails MUST INCLUDE YOUR NAME AND CELLPHONE NUMBER. Without a phone number, 7 On Your Side will not be able to respond. |ntpslabeTny.com/checkwashing-veteran-scam-frauc!12356174)Poles Watch out for ‘check washing’ scam involving your bank account ‘Aol woman sas she ldo areig wong when she gt wapad upla the sam —wheh ght be the stat ao By Shour Hepa and Andtew Medurn Pubs Sep 29,222 at 838 PM EDT Ouxen TOLEDO, Ohio WTVGIGny New) = You wash your ha you wash your clothes bu you know washing a check isa thing? ts rojoke because amos cost an Ohio woman thosends of oars, People geting caught up inthe scam are doing the ight thing. You gt ilo yout mariage wie «check to pay, send it off ant shoud be ove, Bu that’ at wh hsopened wth lor Paton bacate thie woe srmeahere inthe idle Patten sald she rote amargage checkin August an and-devere toa US. 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Shes someone got aheld ofthe actual chck and washed, The sammes took Paton infematon of the ‘heck and mage tou to sone ee or 6600, aston sald se alle Nar cet ion to ery and was tld the check int have her Nandi one 1s“Your duck has bean washed si, Washed what that” Nevers cf eld Paton Lucy, fav protections gt he the money bac, but she had t ge through mor hoop to pay he merge Patan dn do anything wrong, which might be the sees paret al Nethng surprises me anymore becuse here's so much gong onthe worl, Ppl find = way to do some of eventing sd Patton, Joseph Kemasienia sid that he wat aoa vic of sie scam, He and his wife decided to pay a $10 mecca whe check When thy hacks hair account several days ter, Korsseni old WIVG they noticed they were nesty 10000 shor ‘he checc had bean washed and made out "Miguel for $9666 “ust the Postal Senice temendeuy, bu there's lot ota geo thre nous and you cr even get even wth thom anymore sid Komasiwice Its been over tno weeks since he mpated he som, but Korasewic is fortunately sl out abet $1000 Anyone nth stuaton i ecommande to kaep contacting he an give them al documentation ni stay on them fora eine ‘ntotunaty the scam ists hard o preven. The best bets to ump on the usu a Eoon ait haps Tht might mean checking Bak accounts almost daily to spot the oblem blore i wotens. Copyigh 2022 WTVG va Gray Meio Group ne. light tered oltywood Plastic Surgeon Has Wie Using THIS Household itr to Help Remove Years Of Her Face Look For Any High Sehoel Yearbook I's Fee Revealed: The Gorgeous Ov yr PHEV Release Is Here (& Aordabl) Caltornia Heart Surgoon Bags American: "Stop Dolng This To Your Avocados Tha top 3mm oe tet you woud Ree neve gash ee ef ou‘. "Never Going Beck to Prime'—Why 20,000 Users Prefer This Shopping Secret Locate Almost Anyone By Entering ThelcName (This Is Adana Fina Pb Recs omaten Al Seruone Sears Racer uly Soa Ay ae areanes == 25‘312024, 4:18 PM Report Big U.S. Banks Are Sifing Account Takeover Victims — Krebs on Security Coa cos po wei Round NOs SR + rN Pherae eo ao) (COIN H GL) depth security news and investigation Report: Big U.S. Banks Are Stiffing Account Takeover Victims October 7, 2022 72 Comments THIS IS HOW MON ‘* MOVES When U.S. consumers have their online bank accounts hijacked and plundered by hackers, U.S. financial institutions are legally obligated to reverse any unauthorized transactions as long as the victim reports the fraud in a timely manner. But new data released this week suggests that for some of the nation’s largest banks, reimbursing account takeover victims has become more the exception than the rule. The findings came in a report released by Sen. Elizabeth Warren (D-Mass. who in April 2022 opened an investigation into fraud tied to Zell, the “peer-to-peer” digital payment service used by many financial institutions that allows customers to quickly send cash to fends and family. bitpsulkrebsonsecurty.com/2022/1Olreport-big-u-s-banks-are-stifing-account-takeover-vctims! 153/1224, 418 PM Report: Big U.S. Banks Are Stfing Account Tekeover Vitis — Krebs on Security Zelle is run by Early Warning Services LLC (EWS), a private financial services company which is jointly owned by Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo, Zelle is enabled by default for customers at over 1,000 different financial institutions, even if a great many customers still don't know it’s there. Sen. Warren said several of the EWS owner banks — including Capital One, JPMorgan and Wells Fargo — failed to provide all of the requested data. But Warren did get the requested information from PNC, Truist and U.S. Bank. “Overall, the three banks that provided complete data sets reported 35,848 cases of scams, involving over $25.9 milion cof payments in 2021 and the first haf of 2022,” the report summarized. “In the vast mejority of these cases, the banks did not repay the customers that reported being scammed. Overall these three banks reported repaying customers in only 3,478 cases (representing nearly 10% of scam ciaims) and repaid only $2.9 milion.” Importantly, the report distinguishes between cases that involve straight up bank account takeovers and unauthorized transfers (fraud), and those losses that stem from “fraudulently Induced payments,” where the victim is tricked into authorizing the transfer of funds to scammers (scams). ‘Acommon example of the latter is the Zelle Fraud Scam, which uses an ever-shifting set of come-ons to trick people into transferring money to fraudsters. The Zelle Fraud Scam often employs text messages and phone calls spoofed to look like they came from your bank, and the scam usually relates to fooling the customer into thinking they're sending money to themselves when they're really sending it to the crooks. Here's the rub: When a customer issues a payment order to their bank, the bank is obligated to honor that order so long as it passes a two-stage test. The first question asks, Did the request actually come from an authorized owner or signer on the account? In the case of Zelle scams, the answer is yes. Trace Fooshee, a strategic advisor in the anti money laundering practice at Aite-Novarica, said the second stage requires banks to give the customer's transfer order a kind of “sniff test” using “commercially reasonable” fraud controls that generally are not designed to detect pattems involving social engineering, Fooshee said the legal phrase “commercially reasonable —in the way of controlling for scam detection, is the primary reason why no bank has much — if anything “In order for them to deploy something that would detect a good chunk of fraud on something so hard to detect they ‘would generate egregiously high rates of false positives which would also make consumers (and, then, regulators) very unhappy,” Fooshee said. “This would tank the business case for the service as a whole rendering it something that the bank can claim to NOT be commercially reasonable.” Sen. Warren's report makes clear that banks generally do not pay consumers back if they are fraudulently induced into making Zelle payments, “In simple terms, Zelle indicated that it would provide redress for users in cases of unauthorized transfers in which a User's account is accessed by a bad actor and used to transfer a payment,” the report continued. "However, EWS' response also indicated that neither Zelle nor its parent bank owners would reimburse users fraudulently induced by a bad actor into making a payment on the platform. Still the data suggest banks did repay at least some of the funds stolen from scam victims about 10 percent of the time, Fooshee said he's surprised that number is so high, “That banks are paying vietims of authorized payment fraud scams anything at all is noteworthy,” he said. “That's money that they're paying for out of pocket almost entirely for goodwill. You could argue that repaying all victims is a sound strategy especially in the climate we're in but to say that it should be what all banks do remains an opinion until Congress changes the law.” UNAUTHORIZED FRAUD hitpsfkcebsonsecurty.com/2022/ report-ig-u-s-banks-ae-sifing-account-takeover-vctims! 26