Senator Bob Casey (D-Pa.) has urged the Consumer Financial Protection Bureau (CFPB) to increase protections for seniors and older adults who use peer-to-peer payment apps. These apps, such as Venmo, Zelle, CashApp and Paypal, have become common tools for scammers, according to Casey.
Casey, the chairperson of the Senate Special Committee on Aging, requested the protections in a letter to CFPB Director Rohit Chopra cosigned by U.S. Sens. Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), Kirsten Gillibrand (D-N.Y.), and Catherine Cortez Masto (D-Nev.).
“Particularly for older adults with lower incomes, losing even a few hundred dollars can be devastating. Given the increased prevalence of P2P fraud against older adults, we encourage the CFPB to move forward in issuing this guidance to provide better tools to protect themselves and their families,” Casey wrote.
Last year, the Special Committee on Aging held a hearing in which witnesses testified about peer-to-peer apps being used to target older adults. The witnesses said there are too few protections available to older adults using the apps and that frauds involving the services disproportionately affect communities of color.
An attorney with the National Consumer Law Center (NCLC) singled out the increasing prevalence of peer-to-peer apps in fraud schemes against older adults, stating “more protections are needed to give consumers a fighting chance to recover money transferred to scammers,” and that “the warnings provided by the payment apps are simply not enough to protect consumers.”
The NCLC attorney noted that when improper payment does occur, current practices to recover funds include peer-to-peer apps simply asking “the financial institutions or scammers that received the funds to voluntarily return them.” Citing a recent AARP survey, she further stated that most consumers “incorrectly assumed that their payments would be protected if there was an error or fraud associated with the transaction.”
Casey is also a cosponsor on bipartisan legislations called the Stop Senior Scams Act, which would create an advisory committee to ensure banks have the information and resources needed to train employees to spot fraudulent activity.
The number of complaints involving payment apps has tripled between 2019 and 2020, and the increasing trend continued in 2021, according to the Federal Trade Commission. Older adults reported $10 million in losses associated with fraud involving payment apps. People in predominantly Black communities filed more complaints than those in predominantly white or Latino communities, the commission’s representative testified.