Senators to CFPB: Use Authority to Protect Consumers From P2P Payment Scams
The Consumer Financial Protection Bureau (CFPB) should use its authority under Regulation E and the Electronic Fund Transfer Act (EFTA) to protect consumers from payment scams on peer-to-peer (P2P) services like Zelle, according to a letter sent to the agency by six U.S. Senators, all Democrats.
Under the EFTA and the CFPB’s Regulation E, a consumer is protected if a fraudster scams them into handing over account information and then initiates a transfer. If a consumer opens an account specifically to transfer monies to a scammer, then the consumer isn’t protected, according to the letter.
“Determining liability based on whether a consumer or a fraudster physically initiates a transaction is antiquated,” according to the letter, which was signed by senators Elizabeth Warren (D-Massachusettes), Robert Menendez (D-New Jersey), Sherrod Brown (D-Ohio), Catherine Cortez Masto (D-Nevada), Jack Reed (D-Rhode Island), and Raphael G. Warnock (D-Georgia).