financial privacy

PRIMER: A financial fraud crackdown won’t protect consumers from scams

WASHINGTON, D.C. – Today, the global consumer advocacy group Consumer Choice Center launched a policy primer to evaluate legislative solutions for combatting and alleviating the harm caused by payment scams and frauds.

This primer analyzes the Protecting Consumers From Payment Scams Act, and whether the liability remedies proposed would help combat consumer fraud and scams or would ultimately create unintended consequences for consumers that do not punish wrongdoers.

The primer includes key policy suggestions for legislators to help consumers avoid frauds and scams while demonstrating the errors that would come with expanded institutional liability:

Shifting liability to financial institutions will ultimately backfire on consumers, leading to more expansive financial surveillance, higher costs due to more compliance and reimbursements, and a generally degraded consumer experience that eradicates the advantage of popular financial tech and banks.
Consumer financial education is the most effective way to prevent scams.
A national privacy law fostering innovation while protecting consumers
Stiffer penalties for individuals committing frauds and scams

Yaël Ossowski, deputy director of the Consumer Choice Center, explains:

“Though scams and fraud are a persistent issue in the American economy, we should guard against the imposition of yet more costly and intrusive rules that will degrade the consumer experience and likely create more amenable conditions for bad actors to steal.

“Rather than creating a new liability between financial institutions that would have unintended consequences for consumers of all income levels, our existing laws should concentrate on finding and punishing fraudsters and scammers we can already catch,” said Ossowski.

“While we should commend legislators for attempting a solution to frauds and scams, we cannot accept the false promise that more scrutiny on those who follow and abide by the law will deter those who have so far evaded responsibility or punishment,“ concluded Ossowski.

READ THE PRIMER HERE

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, Lima, Brasilia, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

A court injunction saves Americans from putting their financial privacy at risk

Washington, D.C. – Late Tuesday, a federal judge in the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the onerous reporting requirements required of all beneficial owners of LLCs and all other private businesses, as required by the Corporate Transparency Act.

The measure was included in the National Defense Authorization Act of 2021, first vetoed by then-President Trump and later overridden by the House and Senate.

The ruling by District Judge Amos Mazzant temporarily halts the forced collection of beneficial ownership information, which was due to FinCEN by January 1, 2025.

Yaël Ossowski, Deputy Director of the Consumer Choice Center, praised the injunction as a good first step in halting the creeping encroachment on financial privacy by federal agencies.

“The reporting requirements of the Corporate Transparency Act are a slow-roll attack on financial privacy for ordinary people via a mass doxxing of LLCs. For small businesses and consumers that rely on them, this injunction removes the risk inherent in a centralized database of Americans’ sensitive financial information and personal data that would be prone to abuse,” said Ossowski.

Rather than deputizing financial institutions to spy on American business owners and consumers, the Consumer Choice Center believes the federal government and its agencies should look to protecting individuals’ information and minimizing the harm that could come from unauthorized leaks and hacks.

“The once again proves the crucial role of the judicial branch in protecting the individual rights of business owners, consumers, and all Americans, and should demonstrate that the rule of law and the presumption of innocence are integral to the American system,” added Ossowski.

Law enforcement agencies are still empowered to pursue reasonable suspicion of criminal activity, including tax evasion or money laundering, but must do so via legally obtained judicial warrants, which protects both consumers and firm owners.

“To capitalize on this temporary injunction, the Senate and House should pass the Saving Privacy Act, introduced by Sens. Mike Lee and Rick Scott, which would nullify the Corporate Transparency Act as well as offer meaningful reforms to the Bank Secrecy Act and other federal laws that put individual and consumer financial privacy at risk,” concluded Ossowski.

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The Consumer Choice Center is an independent, nonpartisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life for consumers in over 100 countries. We closely monitor regulatory trends in Washington, Brussels, Ottawa, Brasilia, London, and Geneva.

Find out more at www.consumerchoicecenter.org

What’s the best way to protect your financial privacy? Congress weighing legal options

Right now, members of U.S. Congress are debating the best ways they can act to further protect Americans’ private financial information.

A new bill filed in the U.S. Senate would cut back on how much data banks are required to report to the government, but critics warn the regulations are needed to stop criminals.

Channel 2 Washington Correspondent Samantha Manning has the details on the new legislation and the larger situation of financial privacy in the United States.

Every day, Americans around the country are making millions of financial transactions, from credit card and debit card swipes to wire transfers and stock market deals.

All of those moves are monitored by banks, and if they’re deemed suspicious, reported to the government.

However, those reports aren’t without their opponents.

“Something that we’ve lost as American consumers is financial privacy,” Yael Ossowski, Consumer Choice Center, told Channel 2 Action News. “Essentially, we have financial surveillance.”

Ossoswski said his organization supports a new bill filed by U.S. Sens. Mike Lee (R-Utah) and Rick Scott (R-Fla.) called the “Saving Privacy Act.”

The bill would repeal the reporting requirements under the Bank Secrecy Act, which requires banks to report suspicious financial transactions while still upholding recordkeeping requirements.

Just this past month, U.S. Attorney General Merrick Garland announced a major case about Bank Secrecy Act Violations, and T.D. Bank entered guilty pleas for multiple felonies connected to a money laundering scheme.

“T.D. Bank became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures,” Garland said when announcing the details of the case.

But critics say the current laws on the books go too far and violate people’s privacy.

Supporters of the Saving Privacy Act argue it strengthens protections provided by the Fourth Amendment, which prevents unreasonable searches and seizures.

“They’re really trying to make sure the government has warrants and more proof if they try to go after your financial data,” Ossowski said.

The Saving Privacy Act also requires an approval from Congress for any new databases that collect personally identifiable information from Americans.

Published on WSB-TV.

Reform the Bank Secrecy Act to better protect consumer financial privacy

Washington, D.C. – Last week, US Sens. Mike Lee of Utah and Rick Scott of Florida introduced the Saving Privacy Act to reform banking and finance regulations to better safeguard the privacy and security of American consumers.

The bill would amend the Bank Secrecy Act, repealing the need for transactions to be reported to government authorities in “suspicious activity reports”. The bill would also ban a Central Bank Digital Currency, repeal the Corporate Transparency Act, require warrants for government acquiring personal financial information, require congressional authorization for major financial regulations, create a private right of action for those harmed by illicit government activity, and much more.

The Consumer Choice Center believes the bill is a noble, comprehensive, and creative effort at reforming consumer finance and should be championed by representatives in Washington.

“Rather than forcing banks to hound their customers for cash withdrawals to purchase cars, pay rent, or simply live their lives, Senator Lee’s Saving Privacy Act would restore consumer financial privacy and make reporting standards reasonable enough to still target malicious actors and criminals,” said Yaël Ossowski, Deputy Director at the Consumer Choice Center.

“The rigorous Know Your Customer standards from the Bank Secrecy Act have forced financial institutions to collect more information than needed from their customers, leading to the risk of data leaks, hacks, and breaches that have compromised consumer security and privacy.

“This has also forced finance providers to deny accounts to customers based on arbitrary criteria, cutting off consumers who are the least well-off from the innovative financial product market,” added Ossowski.

The bill would no longer require banks to submit compliance reports to financial authorities when they are over arbitrary limits, while at the same time protecting Fourth Amendment protections that have for far too long been curtailed by expansive government policy.

“Rather than dedicating insurmountable of time to compliance and surveillance on customers dealing in lower amounts, financial institutions also will be able to better compete for our business and better protect our financial privacy. This will free them up to focus on bad actors who are exploiting these rules. Consumers deserve no less,” concluded Ossowski.

The Consumer Choice Center supports the reforms behind the Saving Privacy Act, and will continue to champion for consumers who believe in tech innovation, lifestyle freedom, and freedom of choice.

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PRIMER: A financial fraud crackdown won’t protect consumers from scams

A court injunction saves Americans from putting their financial privacy at risk

What’s the best way to protect your financial privacy? Congress weighing legal options

Reform the Bank Secrecy Act to better protect consumer financial privacy

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