NCLC Senior Attorney Provides Testimony to U.S. House Subcommittee on Payment Fraud, Prevention
WASHINGTON – Today, Carla Sanchez-Adams, senior attorney at the National Consumer Law Center (NCLC), provided testimony to the Oversight and Investigations Subcommittee of the U.S. House Financial Services Committee during a hearing titled, “Fraud in Focus: Exposing Financial Threats to American Families.”
“Payment fraud impacts all people— regardless of age, race, income, education, or political affiliation, and technology has created new ways for criminals to steal money,” said Sanchez-Adams. “Protecting fraud victims must be central to any discussion about combating fraud.”
The increasing ease and use of mobile and online banking have provided new opportunities for criminal fraudsters. Consumers are plagued by problems with unauthorized transactions and fraud involving peer-to-peer payment apps, crypto-assets and exchanges, wire transfers, check alterations and forgeries, and Electronic Benefits Transfer card skimming.
In 2024, consumers reported over $12.5 billion in fraud losses to the Federal Trade Commission, but total fraud is far higher. According to the Pew Research Center, 73% of U.S. adults have experienced some kind of online scam or attack, and one in five reported losing money. The impacts of fraud hit older Americans, communities of color, and low-income consumers the hardest, as they struggle the most to recover from fraud losses.
“The financial institutions and companies that design and run these payment systems need to take more responsibility for keeping out criminals, ensuring the systems are safe, and protecting consumers,” said Sanchez-Adams. “Payment system participants should utilize the latest innovative technologies to prevent and detect fraud on every platform. Telecom and social media companies also need to step in to block criminals from sending texts and using platforms to reach victims.”
To combat payment fraud, Sanchez-Adams recommends:
● Closing gaps in consumer protection laws and protecting consumers from both unauthorized and fraudulently induced charges;
● Devoting more attention to the responsibilities of institutions that receive fraudulent payments, including stepping up enforcement of Bank Secrecy Act /Anti-Money Laundering obligations;
● Establishing interagency collaboration to assist consumers with reporting fraud, collecting data on fraud, and establishing systems for sharing fraud data and findings; and
● Working with the Federal Communications Commission to address the role that telecommunications providers play in facilitating fraud.
“We need to update antiquated laws that offer little to no protection to victims impacted by payment fraud,” said Sanchez-Adams. “Consumer education won’t solve the problem, but technology, accountability, and proactive legislation can.”
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