U.S. Sen. Jerry Moran (R-KS) recently expressed concerns with the Board of Governors of the Federal Reserve System about the increasing problem of wire fraud through business e-mail compromise and e-mail account compromise across the United States.
“This method of fraud poses great risks to our constituents, specifically homebuyers,” Sen. Moran wrote with U.S. Sen. Chris Van Hollen (D-MD) in a July 31 letter sent to Federal Reserve Chairman Jerome Powell. “Confidence in our payment system’s ability to safely transfer large sums of money is an incredibly important part of the home buying process.”
According to the Federal Bureau of Investigation (FBI), there was an 1,100 percent increase from 2015 to 2017 in the number of real estate related e-mail compromise scams reported to the bureau, while the amount of funds lost increased nearly 2,200 percent.
Sens. Moran and Van Hollen, who both serve on the U.S. Senate Banking Committee, specifically are concerned that the Federal Reserve’s policies on wire fraud “lack the urgency of the problem,” according to their letter.
“While other countries, like the United Kingdom, have taken proactive roles in preventing wire fraud, especially for real estate transactions, the Fed’s only other substantive effort to date appears to be the Secure Payments Task Force’s announcement to create and publish ‘recommended fraud definitions,’” the senators wrote.
Sen. Moran and his colleague, who noted “the rapidly increasing seriousness of the issue,” presented numerous questions to Powell seeking information on efforts by the Federal Reserve to limit fraud and verify payee matching on wire payments.
Diane Tomb, CEO of the American Land Title Association, applauded Sens. Moran and Van Hollen for their letter asking Powell for information about the work the Federal Reserve is doing to protect consumers and the wire system from fraud.
“Thieves use sophisticated fraud schemes to steal money when people are buying or selling homes and we must maintain confidence in our electronic payment system, which is the fastest and safest way to transfer money,” she said.
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