Protecting Consumers From Payment Scams Act

The Protecting Consumers From Payment Scams Act updates federal law to shield consumers from liability for electronic fund transfers that were fraudulently induced - meaning transfers initiated when a consumer was tricked into authorizing them. It shifts the burden of proof to financial institutions, requiring them to demonstrate that a transfer was authorized or not fraudulently induced, rather than consumers proving they were scammed. For losses from such fraud, the bill mandates that the financial institution holding the consumer’s account and the institution receiving the transfer share the cost equally. This directly affects consumers who fall victim to payment scams and all financial institutions processing electronic transfers, including banks, credit unions, and payment processors.