This alert may not be shared outside your organization, Do Not Repost or send, place on other websites, List servers, or send to others via email, including other associations or parties. Members and Law enforcement use only. Contact us for any permissions. To do otherwise will result in the loss of membership.
Complete Story
09/14/2021
Increased Exposure: What Financial Institutions Need to Do – Now – to Avoid Fraud Liability stemming from Social Engineering Scams
Security Boulevard
It’s going to get much tougher for financial institutions to avoid being declared as liable in the case of electronic fund transfer (EFT) social engineering scams.
Specifically, the Consumer Financial Protection Bureau (CFPB) recently released a Frequently Asked Questions “compliance aid” to provide guidance about its positions on the Electronic Fund Transfer Act (EFTA) and Regulation E. The bureau indicated that, if a third party fraudulently induces a consumer into sharing account access information which is used to initiate an EFT, then the transfer meets Regulation E’s definition of an unauthorized EFT.
In a section of considerable interest, the CFPB states that these institutions cannot take into account a consumer’s negligence when determining liability for unauthorized EFTs under Regulation E. “For example, consumer behavior that may constitute negligence under state law,” according to the section, “such as situations where the consumer wrote the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer’s liability for unauthorized transfers under Regulation E.”
Alerts
The FRPA alert system distinguishes us from other groups by gathering and providing information to law enforcement, retailers AND financial institutions.
more informationResources
Your electronic library to help in fighting financial fraud for all of our partners.
more information