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Federal Consumer Finance Watchdog to Tighten Bank Rules Around Money-Transfer Scams, Report Says

Submitted by ckanon@abi.org on
The Consumer Financial Protection Bureau (CFPB) said that it plans to tighten rules around fraudulent money transfers via services like Zelle by pushing banks to repay more customers harmed by these alleged scams, CNBC reported. These services facilitate quick digital payments from person to person. The CFPB is preparing to issue guidance in the coming weeks that would raise banks’ financial obligations to customers who lose money in a payment-services scam. Banks generally only have liability for such transactions when they’re unauthorized by customers, but the CFPB could raise the bar by deeming payments made to a scammer as unauthorized. A spokesperson for Early Warning Services LLC, a group of seven banks that own Zelle, said the service has helped millions of consumers in their everyday lives, whether to pay rent, get money quickly when in need or satisfy debts to friends quickly. “Protecting consumers is one of our top priorities,” the spokesperson said. “As a network, we constantly adapt consumer protection measures to address the dynamic and evolving nature of deceptive activities fraudsters employ.”