It Takes a Thief…. and a Bank: Protecting Consumers from Fraud and Scams on P2P Payment Platforms

Abstract

This Article proposes statutory and regulatory changes to the Electronic Fund Transfer Act; Regulation E; and the Bank Secrecy Act/Anti-Money Laundering regulations to protect consumers who use instant payment platforms in the United States (such as Zelle and Venmo) from scam artists and fraudsters. After discussing current fraud scams on these payment platforms, the Article discusses the history and context of the 1978 Electronic Fund Transfer Act and Regulation E, and the definition of unauthorized payments and payments made in error therein. The second part of this Article explores changes to the Bank Secrecy Act/Anti-Money Laundering regulations that might make it hard for fraudsters to use the financial system to commit fraud, and might make it easier for financial institutions to identify fraudsters seeking to do so. Finally, this Article provides an update on regulatory, legislative, and judicial activity that took place while this Article was in the process of being published.