U.S. Representative Asks Federal Reserve to Help Prevent Wire Fraud
July 10, 2018
U.S. Rep. Randy Hultgren (R-Ill.) recently asked the Federal Reserve System to take a more proactive role in preventing wire fraud involving real estate transactions.
In a letter to Federal Reserve System Chair Jerome Powell, Hultgren asks the Federal Reserve to address five questions:
- What awareness do you have about wire fraud as it relates to real estate transactions? Do you believe the issue is growing?
- How is the Federal Reserve addressing the issue of wire fraud?
- Has the Federal Reserve considered requiring financial institutions to apply payee matching when initiating a wire transfer?
- Does the Federal Reserve have the requisite statutory authority to address wire fraud issues?
- Has the Federal Reserve determined if the current wire transfer systems technologies will allow for payee verification? If no, why was the payee verification not included in the Federal Reserve’s evaluation of the future of payments system?
“I have concerns that current Federal Reserve policies on wire fraud may not be adequate,” Hultgren wrote. “Evidence suggests that the Federal Reserve should consider taking a more proactive role in preventing wire fraud, especially as it relates to real estate transactions. For example, the United Kingdom’s Payment Systems Regulator has identified payee matching as a possible solution to address the growing issue of wire fraud in their jurisdiction.”
Hultgren pointed to Congressional testimony about wire fraud given last year by ALTA Past President Dan Menennoh ITP, NTP. During his testimony, Mennenoh suggested two areas to help prevent wire fraud. First, he said all parties involved in the real estate transaction need to help educate customers and the dangers and how to protect their data and money. He also suggested that financial institutions should match not only the account number but also the payee’s name when there is a wire transfer.
Contact ALTA at 202-296-3671 or communications@alta.org.