The Lead

Casey urges Consumer Financial Protection Bureau to safeguard seniors against payment app scams

By: - September 6, 2022 1:56 pm

U.S. Sen. Bob Casey said technologies like ChatGPT are already being used – sometimes with no human input — to make decisions about everything from interviewing and hiring prospective job candidates, to promotions. (Screen Capture).

Citing an increase in scams involving peer-to-peer payment apps during the pandemic, U.S. Sen. Bob Casey, D-Pa., has urged the Consumer Financial Protection Bureau to increase protections for those who use the services.

Apps such as Venmo, Zelle, CashApp and PayPal  have become more popular, and are increasingly being used by scammers to defraud older adults, Casey’s office said in a statement. These apps allow users to transfer money directly from their bank account to that of another person.

Currently, banks are only required to protect consumers when an unauthorized payment is made, making it difficult for senior citizens who get tricked into making payments to recover their money, Casey’s office said.

Casey, the chairperson of the Senate Special Committee on Aging, requested the protections in a letter to CFPB Director Rohit Chopra cosigned by U.S. Sens. Richard Blumenthal, D-Conn.; Elizabeth Warren, D-Mass.; Kirsten Gillibrand, D-N.Y., and Catherine Cortez Masto, D-Nev.

In the current session of Congress, Casey cosponsored bipartisan legislation called the Stop Senior Scams Act, which would create an advisory committee to ensure banks have the information and resources they need to train employees to spot fraudulent activity.

Last year, the Special Committee on Aging held a hearing in which witnesses testified about peer-to-peer apps being used to target older adults. The witnesses said there are too few protections available to older adults using the apps and that scams involving the services disproportionately affect communities of color. 

The committee also heard the testimony of a Glenolden, Delaware County, woman who was defrauded of tens of thousands of dollars by a person she met on Facebook who pretended to be a doctor working abroad who was interested in a romantic relationship with the woman.

The number of complaints involving payment apps has tripled between 2019 and 2020, and the increasing trend continued in 2021, according to the Federal Trade Commission. Older adults reported $10 million in losses associated with fraud involving payment apps. People in predominantly Black communities filed more complaints than those in predominantly white or Latino communities, the commission’s representative testified.  

An attorney with the National Consumer Law Center also testified that the warnings provided by the apps are inadequate and that when an improper payment does occur, the current practices to recover money include simply asking the recipient or the recipient’s bank to return it. 

The NCLC attorney recommended payment apps conduct more extensive investigations when fraud occurs, prioritize fraud prevention and remediation and make customer service timelier and more accessible.

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Peter Hall
Peter Hall

Peter Hall has been a journalist in Pennsylvania and New Jersey for more than 20 years, most recently covering criminal justice and legal affairs for The Morning Call in Allentown. His career at local newspapers and legal business publications has taken him from school board meetings to the Pennsylvania Supreme Court and many points of interest between. He earned a degree in journalism from Susquehanna University.