Pennsylvania lawmakers consider requiring banks to better spot and report elder fraud
CBS News is investigating a crime that targets the life savings of a growing number of Americans when victims are tricked into transferring money from their bank accounts to scammers overseas. This wire fraud trend is creating a challenge for banks whose customers are targeted.
FBI agents told CBS News Philadelphia these scammers often look for baby boomers with a lot of money in the bank. Still, anyone can fall victim to the elaborate crimes that come in the form of romance scams, cryptocurrency investment or fear-based schemes.
Internet fraud comes in all shapes and sizes, but experts say they almost always start with a single wire transfer, sometimes with one click or swipe, and hundreds of thousands of dollars can be gone forever.
"Nearly 60% of the stolen money started as a wire transfer. Nobody in the banking industry wants this to happen, but it's happening and growing every year," Nicholas Smyth, the assistant chief deputy attorney general with the Pennsylvania Bureau of Consumer Protection said at a senate hearing in Harrisburg last week.
Smyth said most of the money stolen in financial fraud is never returned. That's why Pennsylvania state Rep. Joe Hogan, a Bucks County Republican, introduced legislation to prevent these sophisticated global crimes. The proposed law would require banks to flag suspicious activity such as an overseas wire transfer, freeze the transaction for a few days, and alert law enforcement who can then investigate. In some instances, trusted family members could also be alerted. This would only apply to Pennsylvanians age 60 and older under the state's Older Adults Protective Services Act. The bill easily passed the House in July with bipartisan support. Now, it's being discussed in the Senate.
At the hearing, many senators told stories of their constituents, family and friends falling victim to these financial scams. State Sen. Lisa Baker, Republican of Luzerne County, told a story about an elderly woman who gave $50,000 away thinking she was communicating with Phillies player Trea Turner.
Banking experts and former FBI agents also testified.
"The criminal enterprises running these scams are very skilled and they are using the best cover stories I've seen," Richard Cimakasky, the fraud and security officer at Penn Community Bank told lawmakers.
Some banking executives asked senators to weigh the pros and cons of giving banks more tools to protect their customers without overburdening their workers.
The bill still needs to pass the Pennsylvania Senate and then go back to the House for another vote before it reaches the governor's desk.
Hogan said similar legislation has been discussed for over 10 years but never makes it to law. He fears they may run out of time again before this session is over.
