DoingItLocal

[Hartford, CT] – Today, U.S. Senators Richard Blumenthal (D-CT), Chairman of the Senate Permanent Subcommittee on Investigations, and Elizabeth Warren (D-MA) joined Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, to announce introduction of the Protecting Consumers from Payment Scams Act, legislation to better protect consumers making online payments through digital payment platforms like Zelle.

As payment fraud skyrockets, the legislation would update the Electronic Fund Transfer Act (EFTA) to clarify ambiguities and strengthen the law to better protect consumers harmed when they make payments. Specifically, it would protect consumers when they are defrauded into initiating a payment sent to a bad actor, when they lose funds through fraudulent bank wire transfers, and when their accounts are inexplicably frozen or closed.

“Zelle’s speed and convenience have made it a target for bad actors looking to trick unsuspecting consumers out of their hard-earned money,” said Senator Blumenthal. “Despite this growing threat, Zelle and the banks that own it have failed to implement adequate safeguards and reimbursement policies to make consumers whole when they fall victim to scams and fraud. Our measure takes bold action where Zelle’s efforts at self-regulation have fallen short, ensuring that instant payments do not automatically result in instant losses for consumers.”

“Right now, fraudsters are using every trick in the book to steal money from hard-working consumers through payment apps like Zelle, Venmo, or old-fashion bank wire transfers. That’s why it is absolutely critical that we move quickly to modernize our consumer protection laws to reflect the realities of today’s payment systems,” said Congresswoman Waters. “The ‘Protecting Consumers from Payment Scams Act’ will clarify critical provisions in law to give consumers the peace of mind to know they are protected if they are tricked into sending money to fraudsters. I want to commend Senator Blumenthal for his subcommittee’s work to shine a light on these payment scams and Senator Warren for her continued commitment on this issue, and I thank them for working with me to introduce this crucial piece of legislation to give American consumers the financial security they deserve.”

“Americans are sick and tired of these scams. Banks and peer-to-peer payment services like Zelle need to be held accountable for the scammers that are operating on their platforms,” said Senator Warren. “I’m happy to join Senator Blumenthal and Ranking Member Waters in this effort to make sure Americans who are defrauded can be made whole again.”

Today, scammers are exploiting various payment systems such as mobile wallets, payment apps, and wire transfers to steal money from unsuspecting consumers. In 2023 alone, the Federal Trade Commission received 2.6 million fraud complaints, resulting in reported losses of $10 billion—a figure that experts believe significantly underrepresents the actual losses experienced by consumers since fraud is vastly underreported.

This year, the Senate Permanent Subcommittee of Investigations (PSI), led by Blumenthal, held hearings and issued a staff report detailing failures by Zelle and its three largest owner banks, JPMorgan Chase, Bank of America, and Wells Fargo to reimburse consumers despite existing requirements to do so in many cases.

PSI’s investigation has found that Zelle’s three largest owner banks reimbursed victims who reported fraud only 38 percent of the time in 2023—a decline from 62 percent in 2019. In terms of dollar value, this translates to over $100 million worth of transactions disputed as fraud not reimbursed each year from 2021 through 2023.

PSI also found that, in 2020, JPMorgan reimbursed just three transactions out of 41,390 scam disputes that year, Wells Fargo did not reimburse any of the 25,061 scam disputes, and Bank of America did not track scam data as a separate dispute category until the second half of 2020. In 2023, the Three Banks reimbursed victims of scams only 12 percent of the time.

The Protecting Consumers from Payment Scams Act would:

• Protect consumers when they are defrauded into sending a payment to a bad actor, and require relevant firms that facilitate these payments to share liability;
• Clarify that consumers are protected when they use bank wire transfers and electronic transfers authorized by telephone call; and
• Ensure that error resolution duties apply if the consumer’s account is frozen or closed, unless access has been denied due to a court order, law enforcement, or the consumer obtained the funds through unlawful or fraudulent means.

(Hartford, CT) – Attorney General William Tong today announced he has opened an investigation into EnergyBillCruncher.com regarding false claims on social media that “Government will cover the cost to install solar.”

In addition to falsely claiming that the “Government” will cover the cost of solar installation, the company inappropriately uses the Connecticut state seal and creates a false sense of urgency, claiming that homeowners must “do this before Friday.”

In an inquiry letter sent today, the Office of the Attorney General seeks information on the ownership of the EnergyBillCruncher website and social media accounts. The inquiry also seeks information regarding the number of inquiries received from Connecticut residents, information the company provided to Connecticut residents, and any Connecticut solar financing, install, sale or distribution companies that may have partnered with the company.

“Free solar does not exist, and the state does not endorse any solar company or any marketing materials making those kinds of false and misleading claims. Electric rates are sky high right now, and we’re all looking for ways to save. But never, ever feel pressured into a contract without checking the facts and crunching the numbers,” said Attorney General Tong.

Connecticut state government does not endorse any solar company or program. While some solar installations may have no up-front cost, and tax credits may be available, there is no such thing as a free solar system. Costs and benefits will vary for each homeowner, and consumers should always do their own research to analyze whether solar is a good investment.

This is the latest in a series of actions Attorney General Tong has taken regarding unfair solar panel sales tactics. Last month, Attorney General Tong sued SunRun Inc., SunRun Installation Services, Bright Planet Solar, Inc., Elevate Solar Solutions LLC and salespeople Dakota Grumet and Sierra Howes alleging deceptive, unfair and otherwise unlawful sales of solar panel systems, including locking consumers into long-term contracts without consent by various means, including impersonating consumers, and installing non-functional systems. In 2022, Attorney General Tong and the Department of Consumer Protection announced an investigation and enforcement action against Solar Wolf Energy over failures to complete, or even begin, promised work. Solar Wolf is currently blocked from doing business in Connecticut as a result of a court order and has since filed for bankruptcy. In 2023, Attorney General Tong sued Vision Solar following more than a dozen consumer complaints regarding predatory high-pressure sales tactics, misrepresentations about financing and tax credits, and unpermitted work that left homeowners saddled with nonfunctioning systems and unaffordable loans. Vision Solar has since filed for bankruptcy.