Testimony of Paul Benda on the Current Fraud Landscape

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Chairman Meuser, Ranking Member Green, and members of the Subcommittee, thank you for the opportunity to offer testimony for today's Hearing entitled: “Fraud in Focus: Exposing Financial Threats to American Families.” My name is Paul Benda, and I am the Executive Vice President of Risk, Fraud and Cybersecurity for the American Bankers Association (ABA) and also serve as the Chair of the International Banking Federation Scams and Fraud Working Group as well as sit on the Advisory Board of the Global Anti Scam Alliance. At ABA, our members know that fraud takes a financial and emotional toll on their customers and banks of all sizes are making extraordinary efforts to protect and safeguard customer accounts as fraud has become more sophisticated.

Introduction

From using breakthrough technologies such as generative artificial intelligence (AI) to old fashioned theft of checks out of mailboxes, bad actors are relentlessly pursuing numerous ways to scam consumers and small businesses out of their money. Banks have a long history of improving and innovating to protect their customers—from the adoption of chip-enabled credit cards to multi-factor authentication to protect user accounts to the use of advanced AI tools to warn customers about potentially fraudulent transactions—banks have been on the front lines of innovation and deploying advanced capabilities to protect their customers. However, the fight against these criminals is one that banks cannot win on their own.

Unfortunately, bad actors are innovating, too. An example of widespread fraud efforts occurred when criminals took advantage of the economic devastation of Covid-19 and the unprecedented government response to support small businesses and out-of-work Americans. By the government's own estimate over $300 billion was lost, fueling the growth of more organized and sophisticated networks of financial criminals who continue to look for new ways to keep the illicit funds flowing. The criminals are now using the tools, the personal information they stole and bought, and networks they built during the pandemic, along with secure messaging technology, to share tactics, techniques and procedures to expand their reach, finding new people to cash stolen checks and provide “mule” bank accounts to receive and move the funds. They are also becoming more sophisticated, using new advanced deepfakes.

Combating these criminals requires not just banks to act but all entities involved in the scam and fraud ecosystem. It's imperative for the telecommunications companies and their regulators to take action to prevent criminals from spoofing legitimate names and phone numbers to convince customers they are speaking with a bank.

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Testimony of Paul Benda on the Current Fraud Landscape

Introduction

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Testimony of Paul Benda on the Current Fraud Landscape

Introduction

In Depth

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